How does an octopus know what colors will camouflage it if it sees in black and white?

The octopus doesn't see in black and white. It is one of the rare invertebrates that sees in color.

This is the best info i could find. Interesting question. :) The Cephalopod Eye: First, the photoreceptor cells in the cephalopod eye point forwards toward the incoming light. Our own visual cells point backwards and absorb light bouncing off the back of the eye. Secondly, the cephalopod eye, like other invertebrate eyes, develops as an invagination, or in-pocketing, of the skin. All vertebrate eyes develop as extensions of the brain. Another difference is in the method of focusing. We use our ciliary muscles to change the shape of our cellular lens to bring objects at varying distances into focus. Cephalopods have a rigid lens of fixed focal length, normally focussed on objects fairly close. They change their range of focus by moving the entire lens closer or farther from the retina with the ciliary muscle. Biologically, it's very clear that the single lens eye of the octopus evolved completely independently from that of the vertebrates. As such, they are excellent examples of convergent evolution, processes where a similar structure with a similar function develops in two unrelated phylogenetic lines. A most unique characteristic of the cephalopod eye is its rotational ability and its consistent orientation in relation to gravity. Using their statocyst, (a balance organ common to many invertebrates), the pelagic or water-dwelling cephalopods are able to always keep their slit-shaped pupils in a horizontal position. Therefore the brain can always safely interpret visual information on the basis that the eyes are horizontally aligned, though the body may be at any angle in the three dimensional water column. Even seafloor dwelling or benthic octopuses have kept this trait as evidence of their pelagic ancestry. Like insects, cephalopods also have polarized vision. The chromatophores and iridescent cells on the skin of cephalopods can create a visual pattern that coincides with polarized light. Octopuses and squid can recognise these light patterns and since the chromatophore patterns change depending on mating season, behaviour, and stress, they can effectively communicate with each other. Polarized vision also allows cephalopods to detect otherwise transparent prey such as jellyfish and ctenophores. ______________ In1960 Moody and Parriss discovered P-vision in octopuses and soon after others found it in the rest of the octopods and decapods (sweet words in the ears of a shoemaker). Indeed, if you have eight or ten arms and a big head you've probably got P-vision. Could it be the secret of how the Giant Squid avoids encounters with eager underwater photographers? This second website lists too much info to paste. http://polarization.com/octopus/octopus.html

This is hard to explain, see when an Oct touches some thing it can identify what color it is by touching not seeing...your right they do see in blk and white.but their tenticles see in High def..n=much better than the human eye...so they can see with their eyes and arms... All chemicals...

Who says it can't see colors?

Octopus have vast number of young and a very competitive lifestyle. They also have very short lives. That allows for very rapid evolution. The octopus doesn't need to see the color because evolution is so extreme that only the best color matching octopus survives. It matches color as best it can with its eyes and perhaps has some general reflecting proteins to help out as well. It still doesn't know how to match colors but most fish don't see color anyways so it might not matter much. Just as evidence that they don't see in color. http://72.14.253.104/search?q=cache:sfrKge7OifIJ:www.thecephalopodpage.org/cephschool/CephalopodVision.pdf+%22color+vision%22+cephalopods&hl=en&ct=clnk&cd=1&gl=us&lr=lang_en "There are differences between vertebrate eyes and those of cephalopods. Perhaps the most surprising difference given the amazing ability of cephalopods to change color is that most cephalopods are completely color blind (Hanlon and Messenger 1996). How do we know? We can train octopuses to pick black objects over white objects, white objects over black objects, light grey objects over dark grey objects and vice versa but we can not train them to differentiate between colorful objects that look the same in grayscale (Hanlon and Messenger 1996). Also, most cephalopods only have one visual pigment. We have three. Although many species have not yet been tested, the only cephalopod known so far to have color vision is the firefly squid (Watasenia scintillans). This species of midwater squid is bioluminescent and has three visual pigments (Seidou et al 1990). All other species tested so far only have one visual pigment"