There is few reasons not to undercut over keeping it at its original value. If the item is new, after everyone else had their fun the price will dive significantly. Remember the Thavnarian dresses? They use to be 1 mil+ gil in HW when it first released. Now? Anyone can have 1. Literally a bargain sale.

If you under cut you make the sale more likely, and if you make the sale when the items hot you get to have the profit be much higher than a month later or so when it'a more than likely to end up being worthless or far cheaper. This practically happens to any item barring the super rare drops from Deep Dungeon and Eureka. Glamour gear? Minions? Mounts? They all eventually will become commonplace and flood the market.

If you don't want people undercutting, have more value in the market board so the supply doesn't outweigh the demand or have a Grand Exchange from RuneScape.