The proper term is Sensory Gating, from Wikipedia:
Sensory gating describes neurological processes of filtering out redundant or unnecessary stimuli in the brain from all possible environmental stimuli. Also referred to as gating or filtering, sensory gating prevents an overload of irrelevant information in the higher cortical centers of the brain. The pulvinar nuclei of the thalamus play a major role in attention, and filter out unnecessary information. Although sensory gating is largely automatic, it also occurs within the context of attentional processes. Though the term sensory gating has been used interchangeably with sensorimotor gating, the two are distinct constructs.
The cocktail party effect illustrates how the brain inhibits input from environmental stimuli, while still processing sensory input from the attended stimulus. The cocktail party effect demonstrates sensory gating in hearing, but the other senses also go through the same process protecting primary cortical areas from being overwhelmed.
This is akin to two people speaking to you at the same time, and you can only pick up one conversation and not the other. In other words, the brain hears what the brains wants to hear. What the brain doesn’t want to hear, they’re dismissed as noise. All this is done at the subconscious level and is totally involuntary and out of your control.
This illusion works well because the two words are short and they are stressed at the same location and at around the same time period. These conditions meant the brain is incapable of processing the information in full, so it is forced to drop one or the other.
Why is this important then? Some folks on the Internet claimed ‘Blind Testing’ as the gold standard, e.g. if it’s not blind tested, it’s not real.
Try this so called ’scientific’ tool on this clip and see how you go. Does this model still apply? No. Blind testing simply do not work. The brain is a complicated muscle and this audio clip should hopefully be enough to convince you blind testing is nothing but a myth.
I repeat - Blind Testing is a hoax.