Pitch perception - Why does our ear not directly detect the missing fundamental frequency?
Here is roughly how it works.


A typically musical note is made out of harmonics and the fundamental. The fundamental is also the spacing between the harmonics.
For 100 Hz fundamental you would get 100Hz, 200Hz, 300Hz, 400Hz, 500 Hz, etc.
For 200 Hz you would get 200Hz, 400Hz, 600 Hz, which is simlar to 100Hz but not the same. Note that specifically 300Hz and 500Hz are missing. The spacing here is 200 Hz
In practice you  rarely get all the harmonics, some are louder than others, some are missing all together, however, you still can easily hear the pitch
That's because you determine pitch by the spacing of the harmonics, not by the lowest. 
For example, if you generate a sound by adding 500, 600, 700 &amp;  800Hz, you will hear the pitch corresponding to 100Hz, although no frequencies below 500 Hz are in the signal at all. 100 Hz is the periodicity, not necessarily the frequency content.
The organ of corti does actually a mechanical Fourier transform. The excitation through the oval window creates a bending wave on the basilar membrane. Due to mechanical resonance of the membrane and some active feedback mechanism controlled through efferent nerves and hair cells, there is a strong localized peak in the bending wave, the position of which corresponds with the frequency
In our example above you would see peaks at 500, 600, 700 &amp; 800 Hz positions, but NOT at 100 Hz. There is no 100 Hz in the signal, so there is no excitation at the 100 Hz location.
The actual pitch detection is done by identifying correlated spectral parts parts of the signal and determining if there is a constant spacing. The spacing is the pitch. I don't know of the top of my head where in the periphery that happens but I'm guessing it's most like down through some correlation mechanism