Assuming a particular psychological function of optical gestalt perception, its impairment would lead to a decreasing extent of gestalt related optical illusion. An increase of optical illusion would be expected in the case of a loss of adaptability and cognitive compensation, usually revising the phenomenon of optical illusion. 16 demented out-patients were compared to 16 hospitalized schizophrenics by a 'Computerized Assessment of Change in Optical Illusion' (CACOI), measuring the extent of optical illusion by patient's assessment of 12 variations of the figure of Mueller-Lyer, differing in baseline length. The results showed a significant increase of optical illusion in demented patients compared to the schizophrenic controls (p = 0.019). Taking into account that the extent of optical illusion by the figure of Mueller-Lyer usually is decreasing with age and was found to be increased in schizophrenics, our results support the hypothesis of an early loss of adaptability and cognitive compensation in dementia.