When I get 1 gil undercut I undercut them for a good percentage of the cost (ex: 500>499>450, or 150,000>149,999>140,000) because I don't have time to dance around relisting ten thousand times. I'd like to get the maximum amount of profit I can get for my item, but I don't see the point in spending hours to go from 250k to 150k in 1 gil increments when I could get there in 10 mins in 10k gil increments.
That being said, I could see list fees back firing and hurting poor sellers at the expense of rich sellers. The point though is to discourage people from relisting items repeatedly. When the relist fee is non-existent there is nothing really stopping you from doing it other the amount of MB camping you are willing to do.
