Reserve is the most transcendently stupid thing in all of ebay, and the more I try to understand it, the more meaningless it becomes.
I think the theory is that some bidders will be enticed by the low price pre-reserve, but then will be willing to pay more if a bidding war starts.
Alternately, the seller knows that the auction might go for less than the reserve price, but wants to reserve the right to decide afterward whether to actually ship the item or not in that case. It basically allows the seller to defer a decision until later, which is in line with human psychology: we’re natural procrastinators.
Or maybe ebay realizes that the feature is completely moronic, but can charge extra fees for it.
The truly broken part is that (a) the reserve price is not public info, and (b) you can bid on an item above the reserve price, but if no one else bids that high it’s still an “auction” meaning that your bid will go in at the “winning” amount and if that’s below the reserve price it won’t actually count for anything, and as far as I can tell the seller won’t even know that someone was willing to pay their reserve price.