I guess it just depends on how the auction house wants to do business.
If they tell people ahead of time, it might discourage people from bidding on a lot. It is the fiduciary responsibility of the auctioneer to get the highest price possible for his client. Auctions are all about competitive bidding. If you discourage even a couple of bidders from participating, it will most likely effect the final price. That is why in the good old days of ebay, a lower minimum bid usually resulted in a higher final price.
On the other hand, if you always use a reserve and don't tell the bidders it will piss them off and that is not good either.
Personally I think the best thing to do is just start the bidding and X and see where it goes. If there are no bids, move onto the next item.
It is just a business decision that each auction house has to make. There is no really good way to handle undisclosed reserves, which is one of the reasons why most auction houses try to shy away from them.
Scott
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