Bill Roper's Journal

... in a live auction it is perfectly normal to not announce a reserve price until everyone has finished bidding and then say "the highest bid was 150 dollars, and has not reached the reserve".

The point is that if you say up front "I want 400 dollars for this" then possibly no one will bid. But if you start it at, say, 200 dollars, then someone may bid that, someone else come in at 210 and back to the first person at 220 etc. each one going just that 20 dollars more and getting invested in buying this item and beating the other person and suddenly they find they are at 500 dollars. This is pretty normal in auctions. And this is the reason for a hidden reserve, to get people bidding and wanting your item (and hoping they'll bid up to a price above your reserve).

It is also possible (on ebay) to lower your reserve and to offer to sell your item to the highest bidder even if it is below the reserve price.

But if you publish a reserve price, then I don't see why you don't set your starting price to that published reserve price. (Heh, just glanced down the desks and the chap two desks down is currently doing something on eBay!)