What's the logic behind hiding the reserve?

[Merick]

Originally Posted by lugerholsterrepair

... Therefore the most the winner could get for what he just bought is to sell it to the second highest bid, having overpaid the difference.

This statement seems to make sense but under scrutiny it falls apart....

Jerry Burney

Not to split hairs with you but my statement stands scrutiny, but only under sterile academic theoretical circumstances where every interested party (the whole market) can attend a fair auction. Also there may have needed to be an assumption about symmetrical information, I forget. Obviously as soon as we leave the classroom and enter the real world my statement immediately falls into very very small pieces. Henceforth let us be friends.

Knowledge is a great thing to have, and is why I joined the forum. God knows I can't get by on my looks alone.

Back on topic; Ed's post #4 is correct on how reserves should be used. Unfortunately they are sometimes misused and my sincere advice is if you don't like what a seller is doing before you enter into a contract with him, you probably won't like what he does after either.