This paper presents a rate-code model of binaural interaction inspired by recent neurophysiological findings. The model consists of a peripheral part and a binaural part. The binaural part is composed of models of the medial superior olive (MSO) and the lateral superior olive (LSO), which are parts of the auditory brainstem. The MSO and LSO model outputs are preprocessed in the interaural time difference (ITD) and interaural level difference (ILD) central stages, respectively, which give absolute values of the predicted lateralization at their outputs, allowing a direct comparison with psychophysical data. The predictions obtained with the MSO and LSO models are compared with subjective data on the lateralization of pure tones and narrowband noises, discrimination of the ITD and ILD, and discrimination of the phase warp. The lateralization and discrimination experiments show good agreement with the subjective data. In the case of the phase-warp experiment, the models agree qualitatively with the subjective data. The results demonstrate that rate-code models of MSO and LSO can be used to explain psychophysical data considering lateralization and discrimination based on binaural cues.