How auctioneers set reserve prices in procurement auctions

•The Subjective Conditional Probability (SCP) model explains ex-ante reserve prices that decrease in the number of bidders.•The SCP model explains ex-post reserve prices that increase in the realized auction price.•A reduced-form linear regression model exhibits poor performance in out-of-sample forecasting relative to the SCP model.•The SCP model is more favorable than format-specific model to explain reserve prices in ex-ante and ex-post formats.•Incorporating risk aversion or unconditional probability transformation provides limited improvement to the predictive power of the SCP.