I personally try to walk around and keep my prices sort of around the general prices of others. That said, if an item is a pain in the butt to get regularly, I either don't sell or don't drop the price to lower than I think it's worth. On the flip side, while I try to avoid undercutting other sellers too badly, I also won't set a price I think an item won't move for.
An example is Notch apples. While I respect other sellers and I hate to not match their price on Notch apples, I just don't think people will ever pay three digits for one. (Please don't hate me for saying so! It's just what I think. 0:-o ) So I set my price considerably lower, around a price I personally would be willing to consider. Same goes for blaze rods, though I think peeps have been dropping their prices to near mine lately.)
I have a decent chunk of change, this is true. But I dunno...certain things I just would rather grind out myself than pay humungo fees for. Ghast tears, concrete, certain heads. A bear head for example. I might have considered 50k, but never 100k (unless I had every single other head in the game). Luckily I don't need one now, but that's just my thoughts. Common heads tho? I'm not paying four digits for a zombie head...but that's just me. If you can get it, gg for doing so, but personally were I selling zombie heads I'd go for about 500 because of zombie grinders.
So that's just my logic when I set prices.