I really don't want to moan about undercutting but....

[Lyrinn]

People that undercut by 1-100 even 1000 gil I can understand, you like me want your stuff to sell and sell the fastest. It's the people that just randomly throw up prices for stuff and undercut by 5k or even 10k on an item that really annoys me. Why anyone would kill a market that they can make money on baffles me.

It's simple, you go by percentages. On an item that sells for 50k+, undercutting by even 1k is meaningless. If you start undercutting by 5k or 10k, you discourage your competitors who are looking to undercut you in turn from doing so, as it would mean they would have to drop by the same amount.

I could also go into the ugly details of the underlying stochastic demand models and optimal times/amounts to undercut, but that's way too much effort for a game.