I'm petty. I will sell things at a reasonable price when I undercut, enough that it's acceptable of course and not completing destroying the market. But if you undercut me by 1 gil, then I'm going to undercut you by 100 - you keep doing it and each time the amount I undercut will increase until you back off, buy me out - or someone purchases my items.

I despise 1 gil undercutters. Probably because I'm from SWTOR. Ain't personal my bros, it just makes me see red.