The KEY, as I understand the clause;
is that the Offer Price will automatically escallate, determined by a competing Offer:
This sounds pretty slick, and underhanded, and, probably in most States, illegal!
The reason that it should be illegal is that competing bids are supposed to CONFIDENTIAL.
If someone is disclosing other offers, they would be in violation of the law.
In California, I am pretty sure that the offending Realtor would lose their license, I don't know about other States.