Welcome to economy 101.

It's called competition. It's existed since the dawn of time and you see examples of it everywhere you look. If a competitor can't get a better product, prices will come down so they can guarantee sales. Since all the 'products' in FFXI remain pretty constant, aside from HQ items, there will always be undercutting to a good extent as people want to guarantee that THEIR item is the one which sells, rather than their competition.

After all, what's better? Putting an item up at full 'normal' price, and waiting up to a few days for a sale, or lowering the price a little and guaranteeing a quick sale?