[raulus]

There do seem to be different mechanics when it comes to applying reserves, which I think can lead to different results.

For example, some auctions advertise that there is a reserve from the start. Others wait until a couple of days before closing before disclosing that there is a reserve, and often even telling you what that reserve actually is.

My experience is that having an unknown reserve (i.e. you know there's a reserve, but have no idea how big it is) from the start has a chilling effect on the bidding, where many bidders won't even bother, because they assume the reserve is so high that it's impossible to get there. On the other hand, having a reserve that sneaks up on you suddenly a couple of days before closing can also stifle bidding, but at least it gives the market a chance to first see if it can clear the reserve before it ever kicks in. Plus if you know what the reserve is, then you can always make an informed decision about whether it's worth continuing to bid, or whether you should just abandon all hope.

Some auctions will basically let you bid at the reserve price unilaterally. Others require that you need a partner in crime to bid against you to get up and over the reserve price.

My experience is that if you need a partner in crime, then it's probably game over, because you can put in a fat bid, but when everyone else gives up, then forgeddaboutit. If you can hit the reserve price unilaterally, then at least you have the option to go there if you really want to.

I've recounted the story here before (although I can't seem to find it to just copy/paste now) of a 52B Mays in PSA 9 that went to auction in late 2021/early 2022. It first came to market with a reserve. Bidding was going strong, and reached $100k+. Then the reserve popped at $200k ($240k with the juice) a couple of days before the auction finished, and everyone gave up. Since this was one of the AHs that let you unilaterally bid at the reserve amount, I toyed with the idea of putting in a bid at $200k, but couldn't bring myself to do it. Naturally, it went unsold.

A couple of months later, the exact same card on the exact same AH platform came up again, this time without a reserve. Things went similarly up until the last couple of days. No reserve this time. And then the price went absolutely nuts in the last day. Price doubled, then doubled again. Next thing you know, the final price (with the juice) ends up at $444k.

Bottom line for me is that if you're going to do an auction, then do an auction. Adding a reserve just seems to really screw with the whole flow and animal spirits that are the key element in the auction format. If you really want the certainty of getting your sales price, then sell it using a BIN, a private sale, or a high starting bid on eBay. Trying to get the best of both worlds seems like you end up getting the worst of all worlds.