What is the point of reserve price auctions vs. minimumacceptable starting bid?

[Harvey A. Kader]

I have conducted auctions both ways. I get GREATER success with the reserve
method. Why? Using a reserve gets people interested in your item. It is purely
psychological. With a minimum bid which is too high, people might pass over your
item. In contrast, with a minimum bid of only $1.00 or $5.00, and a reserve,
people will bid. If the reserve is not met, I then offer the first few bidders
the item at the reserve price. Eight times out of ten, people then buy the item
if their bid was reasonably close to the reserve because now they are close, but
not quite there, to buying the item. It is all psychological, and this technique
WORKS. Harvey.

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