Try following for the cheapest prices on the market:
1 AM: 15000,15001, 15002
4 AM: 14998, 14999, 15000
7 AM: 14997, 14998, 14999
and so on.
Evidently your scenario 2 is preferable to this one. By enforcing scenario 2, you force people to reach the equilibrium price faster. Currently in many markets the equilibrium price is being reached, but it is going so slowly due to the silly 1 gil undercuts.
The ones that benefit the most currently are sellers in market where everyone is a 1-gil undercutter, because they are are slowing down the rate at which the equilibrium price is reached from "above".
This cements my belief that undercutting is in general fine, but silly undercutting like "1-gil" undercutting is not fine.
Not really if the current 5% loss is redesigned to be split into 2.5% loss on posting and 2.5% loss when the actual sale goes through. I.e. so that if you only posted once, you would lose the exact same amount, but if you reposted several times you would lose more.
Actually, the equilbrium price would go up due to there still being a few people that would post more than once, but the actual lowest price would go down in markets previously dominated by 1-gil-undercutters. This is because the equilibrium price would be reached faster from above.