What about the physiological effect of getting lots of people involved at a very low price bidding on an item?

a. If the seller starts at .99 he may get more people involved to put a bid on it. Once I bid on something, it has an competitive effect on me sometimes and I become more interested.

b. Also when others view the item, they will see a bigger "bid count" and thus might be affected by that. There again, if I see a whole bunch of people bidding lots of individual bids, I tend to become more interested in the item since there was so much action on it.

c. Finally, didn't ebay at one time have a "hot item" feature where those auctions that had lots of action showed up somewhere special???

At any rate, the reserve protects the seller from an item going to low yet allows them to start the item very low to get more people involved.

I don't see big deal about a seller having reserve. If you bid the price you're willing to spend on it, then most likely you'll be over him minimum anyways.