Psychoacoustics explains why some audio processing works and some does not: MP3/AAC compression works because of auditory masking (loud sounds hide quieter ones at nearby frequencies), stereo works because of interaural level and time differences, and loudness meters (LUFS) exist because of equal-loudness contours.
Key psychoacoustic principles: the Haas effect (sounds arriving within 40ms are fused into one perception), the missing fundamental (the brain reconstructs a fundamental frequency from its harmonics even when it is not physically present), and auditory scene analysis (the brain separates mixed sounds into distinct sources — the 'cocktail party effect').