In some situations, where the auction hasn't ended yet and the highest bidder is less than the normal bid increment amount over the previous bidder, one can deduce that the bid is already at that bidder's maximum. Thus it might, on the margin, encourage other folks to place a new bid because they know they will be the highest bidder by just offering a little bit more. Still, it doesn't help protect against those bidders who might increase it later or snipe the auction.