Yes, but in terms of classical game theory, I'm not sure how...

Yes, but in terms of classical game theory, I'm not sure how smart it is to enter the fray with a bid that is less than 1% higher than the previous bid.

All you are doing is ensuring that your bidding opponent is going to lift his initial bid, in which case you will need to respond if you want to stay in the hand.

So why no make the first bid one that at least tells the other guy that you are serious, which might send him packing.

This way all the new bidder has done is create a situation in which it is almost certainly going to be faced with a higher counter-offer at some stage.

Poorly-advised, I think.