Undercutting

[Niwashi]

So the inferno Horn usually sells for 1.2 mil at the least. So people are so desperate for gil you will undercut someone and the idiots follow along with this clown, to go as low as 900k? Where they do that at?

If it's sold before at 1.2 mil, then there are likely still some players willing to pay that much. However, there are also a lot of players who would like one, but are either unable or unwilling to pay that much. Some of them might however be willing to pay 900K. All those who would pay 900K but can't or won't pay 1.2M have just been added to the buying pool by the player who was willing to undercut that far. More potential buyers means less time until one of them comes across the MB listing and buys it, resulting in a quicker profit to the seller.

That's the logic behind any large undercuts. The 1 gil lower style of undercutting is simply an attempt to stay at the top of the list to be the next sold item, but it doesn't really impact how soon the next item will sell. The significant drops like this example are an attempt to increase the number of potential buyers, so that it will sell faster. Some players desire a quick profit more than a larger but long delayed profit. (It also means this type of large undercut makes a lot more sense on big-ticket rare items than on common but high-demand items.)