Every time the price changes on a listed item, up or down, I get an email in my inbox notifying me of a price change on a watched item. I look at the email, which would seem to me like free promotion of their listed item. A reminder that it's on your watch list and it's still for sale - a wiggle of the worm. And it's for Free.
As for the strategy of raising the price, perhaps they are at their bottom line for an item and still want to send the free advertising out. Who knows. It could be delusions of grandeur. If something has been for sale for 6 months without a lot of interest, then the market forces have spoken and the item is priced wrong. It's a tougher concept for some to accept.