You've answered your question in the second sentence. What it all boils down to in a free market is: What do you want more, the merchandise or the cash? That goes for both buyer and seller. The grocer wants the dollar in your pocket more than the quart of milk on his shelf; if you want the milk more than the dollar in your pocket, sale.
Those who under price obviously want the cash more than the merchandise, regardless of its worth. On the other hand, those who overprice want the merchandise more than the cash. There are intangibles involved, the biggest probably being a sentimental attachment or, maybe, a bit of arrogance. If I make an offer and I get a sneer in return, I just move on. A lecture or an argument over his steadfastness is pointless and says more about you than him. The deal of a lifetime comes along every couple of weeks.