Induced movement occurs not only when an object surrounding a stationary one moves below threshold but when it moves above threshold. The above-threshold effect is particularly puzzling and seemingly irrational because the relative displacement should be fully accounted for by perceiving the moving object in motion. The accepted theory has been that such excess motion can be explained in terms of a separation of systems: The enclosed object is governed by the relationship to its immediately surrounding frame of reference, and the latter is governed either by the relationship to its surrounding frame of reference or to the observer. An alternative explanation is that when induced motion occurs, the moving object is perceived to be either stationary or moving less than is warranted by its actual motion. Evidence is presented supporting this hypothesis according to which the relative displacement is apportioned phenomenally to either the induced object, the inducing object, or both. The objective motion of the inducing object is thus in whole or part transferred to the induced object. Thus, excess phenomenal motion does not occur, and induced movement can be regarded as the rational solution to a problem.