I've encountered online auctions where the seller has set their reserve price hidden. What are the benefits to the seller that would cause them to do so?
As a buyer, if I see an item I like, I may put in a bid. If it has a hidden reserve and I did not meet it, the systems tells me right away. I can then either move on, or place a higher bid.
And even if I'm not bidding, I'm told the reserve for the item has not yet been met.
I agree that not letting your minimum price be known is a good tactic during negotiations. But here I'm bidding. There's no opportunity to negotiate with the seller. If there's anyone I'm negotiating with, it's the other bidders, in a sense.
If the reserve price is known, I may either put in a bid, or decide that the reserve is too high for me and move on without bidding. If the reserve is right at the edge of my budget, I may be tempted to go over my budget just to meet the reserve.
If the reserve is hidden, I can play the guessing game, by bidding the minimal increment, until I either meet the reserve or reach the extent of my budget. I'm less tempted to go over my budget, since I don't know if I'm off by 5 or by 500.
So I see no real benefit to hiding the reserve price. Yet I see it being done all the time. What am I missing?