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Eric BI still don't think it will make a difference. You say that it might price in a few more bidders. But even with your argument it would only price in 1 more bidder - the first one.
But ignoring that. Let's say there are 4 bidders willing to go to $1,050 (from the first example). So if it's at $1,000 you will get another bid to get it to $1,050. But that assumes that due to the starting bid and prior activity, it was sitting at $1,000. What if it was sitting at $1,040? Then nobody is willing to go to $1,092. Same with $1,020, nobody going to $1,071. Or even $1,001, nobody willing to go to $1,051.50.
It's only when the price ends up between $950 and $1,000 that the 5% increment helps for those folks willing to go to $1,050. Or half the time it helps and half the time it doesn't.