A reservation price is important in negotiations, because it helps you understand at what point you need to walk away. If your counterparty is not prepared to meet you at your reservation point, then the negotiations will have failed. You should not reveal your reservation point during negotiations, as this will put you at a disadvantage. For example if you are selling a property for $500,000, but your reservation price is $450,000, then buyers will only offer you the minimum they can get away with paying. By withholding your reservation price, you may have buyers propose to buy the property for $480,000, which would result in a successful deal.