The article discusses how increasing the reserve price in auctions can affect bidder behavior. By analyzing a common value auction model, the researchers found that raising the reserve price can deter some bidders from participating and becoming informed about the item being auctioned. They developed a test statistic to determine when it is best to raise the reserve price, which is not influenced by the distribution of valuations. Applying this analysis to U.S. offshore oil sales, they discovered that the reserve price is currently set too low.