Hi, I'm one of those undercutters. The gist of it is this:
Quote Originally Posted by Little_Ifrit View Post
To piss people off that get pissed off by such trivial things.

Its fun.
The more detailed response is that (note that these are my motives and not necessarily the same as everyone else who undercuts) I've already established my markets. I have absolutely nothing to lose. People entering my markets are deemed "nuisances," especially so since the vast majority of them are looking to make some quick gil for housing and whatnot. As such, most people don't have the time, patience, or initial capital to constantly get undercut, so they leave. I effectively force people to look elsewhere by crashing my own markets when they enter and then resume monopolising when they leave. If they persist, then prices remain low and both parties lose out. Dirty, but effective.