Don't worry about your competitors, worry about your own account. If you keep worrying, you'll keep reducing your prices, which in turn will cause them to reduce their prices, which will cause you to drop your prices, which will cause them to reduce their prices. Before you know it, you'll be listing everything for 5c.
Buyers don't always go for the cheapest. They often go for the more reliable of sellers. I have a lot of items listed at a high price than competitors and I still sell stuff when they don't.
Stop worrying about everyone else. It will do your head in.
