What is Octave Equivalence? This is an updated copy of a question I asked on Physics Stack Exchange not too long ago. Since I work primarily in mathematics, I thought it would be a good idea to ask it here as well (especially after being inspired by the popularity of this question).
As part of some work I've been doing in signal processing and Fourier analysis , I recently ran into a couple of questions regarding "octave equivalence," the psycho-acoustical sensation that frequencies differing from each other by a power of 2 are somehow "the same." I'd like to incorporate this into a construction I'm doing in my work, although I'd prefer it to not be ad hoc or even mostly biological; that is, I'd like some kind of mathematical statement from which I could "read off" the phenomenon of octave equivalence in the same way that one can "read off" the phenomenon of beats from (if I recall correctly), the double angle formula. 
There doesn't seem to be too much literature on this subject, but here is what I've found so far. Apparently, the cochlea in our ear does something like a windowed Fourier transform. After extracting the frequency content from an auditory signal, the brain infers the fundamental from the partials available. This is why when actually hearing frequencies of, say, 400, 500, ..., 900 Hz, we may perceive a fundamental of 100 Hz. So, according to this logic, the phenomenon of octave equivalence arises because the frequencies $f$ and $2f$ share so many partials within the given window, in fact, more than with any other frequency $nf$ for $n>2$. 
Is this sufficient? I'm not sure it is. For example, I was playing around on Maple with pure sine waves, and it seems as if one's ability to perceive pitch affinities, as they're called, is significantly dulled when complex signals are not used. I'm not sure why this is the case. 
Also, to anticipate people's statements, I do know that these matters have a cultural component as well. However, from what I've read, octave equivalence has been detected in rats and human infants, making it seem at least somewhat universal. What is done with this phenomenon, of course, is completely subject to the particularities of one's place int the world. 
If someone could point me to anything in the mathematical physics literature on this topic, I'd be very grateful. 
Thanks. 
 A: Visit http://www.a3ccm-apmas-eakoh.be/index.htm
ISBN 978-90-816095-1-7
           Applying physics makes auditory sense
       A New Paradigm in Hearing

       Willem Chr. Heerens

       and

       J. Alexander de Ru

       ©2010 Heerens and De Ru

“The incoming sound signal is transformed into the sound energy signal inside the cochlea. It is this signal that evokes both the mechanical vibrations in the basilar membrane and the corresponding electrical stimuli in the organ of Corti, stimuli that are subsequently sent to the brain in a frequency selective manner.”
Mathematically, this signifies that the mammalian cochlea differentiates and squares the incoming sound pressure signal.
In terms of physics, it means that a sound energy signal is offered to the organ of Corti. Functioning as a Fourier analyzer, the organ of Corti subsequently converts these incoming signals into the sound energy frequency spectrum that is transferred to the auditory cortex in a frequency selective way.
Salient experimental results so far • For residual tone complexes – harmonic series where the first harmonic or fundamental is missing – the differentiating and squaring process in the cochlea reconstructs perfectly the corresponding but missing fundamental. • Contrary to the conclusion that an early neural mechanism is responsible for the mystery of the inferential pitch, strong evidence exists that the cause for this reconstruction of the virtual or fundamental pitch is hydrodynamic in origin.
A: I think a good start would be Music: A mathematical offering by Dave Benson, particularly Chapter 4.
My recollection definitely agrees with yours that our perception of consonant octaves (and fifths etc.) is a phenomenon that occurs with complex sounds (pitches with overtone series included) rather than with pure sine waves.
I remember reading somewhere how investigating the specific waveforms of an oboe and a horn can show mathematically why a major third sounds good with the horn above the oboe, but a perfect fourth sounds good with the oboe above the horn. (Please consider every single specific detail in that sentence extremely suspect.)
A: Octave-equivalence is a learned phenomena.  There is no mathematical reasoning for why we should hear a frequency ratio of 2:1 as more "equivalent" than 3:1 or 5:1, for instance.
Check out the Bohlen-Pierce Scale for an example of a scale which uses the tritave (frequency ratio of 3:1) as an equivalence interval rather than the octave.  Many individuals (e.g. Elaine Walker, proponent of the BP scale) claim that they can hear tritaves as equivalent, after years of personal experience with the scale.
As for literature on the subject, I would recommend you check out Tuning, Timbre, Spectrum, Scale by William Sethares.  If you cannot get a hold of this book, Sethares and Milne have many other related studies concerning the psychoacoustic effect of timbre on intervals.
A: Valuation of meta-information fails at all factors of two of a given fundamental within discriminable range, for all modalities and for all species.  It's an inherent limit in multicellular information processing.
The paradox of octave equivalence is resolved by noting that the thing that sounds "the same", and the thing that sounds "different" are two different entities - the stimuli themselves, vs the information about their relationship.  The stimuli remain different (higher and lower pitched), and the "sameness" is a more fundamental currency, not unique to audition...
Without a baseline of sameness we'd possess no empirical value of difference, or informational weight, and factors of two of a fundamental component are the simplest possible frequency relationships - all others are, by definition, more complex, resolving to ever-larger temporal integration windows.
IMHO the octave equivalence paradox is a big clue as to the nature of informational entropy in cognition, and a key piece of the puzzle in solving the binding problem...
A: Octave equivalence stems from sympathetic vibration.  If you play a Bb on say a trumpet into a piano with the sustain pedal down, it will make all of the Bb strings ring in the piano.  If the strings of the piano were tuned to the overtone series of Bb, the F and D and Ab would ring too only less strongly.  The other strings on an equal tempered piano won’t sympathetically vibrate because of microtonal variance from the driving frequencies.  The hairs in your cochlea are subject to this same phenomenon.  If a sound will vibrate one hair, it will vibrate all the hairs (roughly) doubles or halves of its length.  
