Psychological experiments have shown that the capacity of the brain for discriminating visual stimuli as novel or familiar is almost limitless. Neurobiological studies have established that the perirhinal cortex is critically involved in both familiarity discrimination and feature extraction. However, opinion is divided as to whether these two processes are performed by the same neurons. Previously proposed models have been unable to simultaneously extract features and discriminate familiarity for large numbers of stimuli. We show that a well-known model of visual feature extraction, Infomax, can simultaneously perform familiarity discrimination and feature extraction efficiently. This model has a significantly larger capacity than previously proposed models combining these two processes, particularly when correlation exists between inputs, as is the case in the perirhinal cortex. Furthermore, we show that once the model fully extracts features, its ability to perform familiarity discrimination increases markedly.

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