Retinal lateral inhibition is one of the conventional efficient coding mechanisms in the visual system that is produced by interneurons that pool signals over a neighborhood of presynaptic feedforward cells and send inhibitory signals back to them. Thus, the receptive-field (RF) of a retinal ganglion cell has a center-surround receptive-field (RF) profile that is classically represented as a difference-of-Gaussian (DOG) adequate for efficient spatial contrast coding. The DOG RF profile has been attributed to produce the psychophysical phenomena of brightness induction, in which the perceived brightness of an object is affected by that of its vicinity, either shifting away from it (brightness contrast) or becoming more similar to it (brightness assimilation) depending on the size of the surfaces surrounding the object. While brightness contrast can be modeled using a DOG with a narrow surround, brightness assimilation requires a wide suppressive surround. Early retinal studies determined that the suppressive surround of a retinal ganglion cell is narrow (< 100–300 μm; ‘classic RF’), which led researchers to postulate that brightness assimilation must originate at some post-retinal, possibly cortical, stage where long-range interactions are feasible. However, more recent studies have reported that the retinal interneurons also exhibit a spatially wide component (> 500–1000 μm). In the current study, we examine the effect of this wide interneuron RF component in two biophysical retinal models and show that for both of the retinal models it explains the long-range effect evidenced in simultaneous brightness induction phenomena and that the spatial extent of this long-range effect of the retinal model responses matches that of perceptual data. These results suggest that the retinal lateral inhibition mechanism alone can regulate local as well as long-range spatial induction through the narrow and wide RF components of retinal interneurons, arguing against the existing view that spatial induction is operated by two separate local vs. long-range mechanisms.