A reservation price is the point at which a party is indifferent between settling and pursuing its next-best alternative. For a plaintiff, it is the lowest amount that is still better than the expected value of continuing to litigate, net of costs, delay, and risk. For a defendant, it is the highest amount still better than that same expected value calculation run from its own side of the case.

The reservation price is derived from, and should never exceed, a party's assessment of its BATNA, since no rational party would accept settlement terms worse than its best available alternative. In practice, reservation prices shift over time as new evidence, rulings, and cost accruals change each side's expected value of continued litigation, meaning a number fixed at the start of a case can quickly become stale.

Juricratic computes a reservation price as a direct output of its expected-value simulation rather than a gut-check figure: because the engine already models probability-weighted outcomes and litigation cost accrual over time, the reservation price at any point in the case is simply the point where the modeled expected value of continuing equals the settlement amount under consideration.

Litigators calculate their client's reservation price before entering settlement talks so they know, in advance, the line below which walking away and litigating is objectively the better choice, and they update that number as the case develops rather than anchoring to an outdated figure set at intake.