Agreed, you will get a lot more watchers and views but very rarely will you get more money, the only advantage is that your listing fees are less but it is a calculated gamble.
That is certainly the main incentive for many, but as BollyRob says, you rarely benefit financially.
I don't sell a phenomenal amount on ebay, just enough to keep it interesting, and my thinking is that there is no single approach that fits all.
If I am selling say a vintage, 1970s wristwatch that say I paid £100 for and that I know should sell for c. £250, then I see little point at starting at 99p, for a couple of reasons. I don't want watching figures inflated by people who think they'll win it for 99p, or even £9.99. Also, I don't want to risk selling it for much less than my original outlay of £100 plus Ebay fees, just in case it gets missed. I'd rather pay slightly higher insertion fees, which in the scheme of things are negligible compared to how much you could lose. So in this case I might start at £99 which will still be low enough to attract the serious buyers. If it sells for only £99 then I've not lost much (never happened yet, touch wood).
I've even listed such items as 'Buy it Now or Best Offer', and if I think it should easily realise £250, but I'd be happy to accept say £220, then I'll list it at £250 or even slightly higher, and prime it to accept £220. Most people who are serious and know the usual realised prices tend to make an offer roughly 10% lower than the asking price (only in my experience). I've never yet had anything unsold or lost £££ on the final price. Make sure your pics and the descriptions are clear, and you'll get and maintain interest.
For something of a lower value which I perhaps paid very little for, then I'd happily start at 99p and take a risk.
When buying I often look very carefully at items that have terrible photos as these tend to put people off, and I've had some real bargains (also the odd duff buy, but more + than -)
