Stereoacuity thresholds measured on disparity pedestals are generally found to increase exponentially as the pedestals move away from horopters. However, Farell, Li, and McKee recently found that for sinusoidal stimuli this threshold function had a dip—a pedestal effect. This paper examines the underlying neural mechanism. We suggest a general disparity coding scheme with two position parameters, which are necessary to account for the phenomenon that the response of the energy model depends on the absolute phase of the stimulus. This scheme was implemented to simulate the responses, calculated from an energy model, of the neurons of a full V1 cortical column. To explain the stereo pedestal effect, we propose a decoding mechanism, which is first processed along the phase dimension and then along the orientation dimension. The final step of the decoding mechanism, probability summation over the outputs of spatial frequency channels, yields the dip, producing a disparity increment threshold function similar to the psychophysical result.