The appearance of a patch of color or its contrast depends not only on the stimulus itself but also on the surrounding stimuli (induction effects). We suggest that these induction effects are epi-phenomena of color constancy (first order color adaptation) and color contrast discrimination (second order color adaptation) mechanisms. Despite accumulated electrophysiological and psychophysical findings on the role of the surrounding color and contrast on the perceived central stimulus, no previous models have been proposed which integrate this data. A comprehensive computational physiological model is presented which describes the retinal and cortical color-coded receptive fields and their local and remote adaptation mechanisms. The model's predictions for both induction effects, color induction and contrast induction, are presented. The model also predicts the effect of variegated surrounding on the central perceived color.