Why does the competition sometimes price the same?

Price or pricing is probably one of the most difficult issues to resolve in the theory of economics. Transformation from a raw material to a finish product goes through several stages of pricing which is finally reflected in the ultimate price to the consumer at the checkout counter.
How these prices are set is the quintessential question of modern economic systems. It doesn’t matter if the system exists in a controlled economy where the state controls all the means of production, a semi-controlled system where the means of production are shared by public and private sectors or a market economy where the means of production are left entirely to the market. Today, a pure market economy doesn’t exist anywhere because production leves is determined by the market but regulated by the government in all of its micro and macro stages of production.
There is a classic story about “price wars” that is set between two stores one across from the other selling a single item which is discounted every day when one store advertises it’s ask price the other bids it down. At the end, the losing party comes over and offers to sell to its competitor and end the war but wants to know how his competitor could sale below cost and stay in business he asks? I simply stole from your warehouse the other replies. In the short term, price wars are good for buyers, who are advantaged by lower prices.
Characteristically, the smaller, thinner margin firms cannot compete and must go out of business. The remaining firms absorb the market share lost by competitors. However, with fewer competitors in the market, prices tend to increase, and more often than not, prices end up higher than before the price war started resulting in a disadvantage for consumers.
What triggers price wars?
Oligopoly: If market segment is an oligopoly (few competitors), the actors will closely monitor each other's prices and be prepared to respond to any price cuts.
Penetration pricing: A new entrant to the market will most likely offer lower prices than established market prices.
Product differentiation: Some products are perceived as commodities, where there is little to choose between competitors-- like airline travel --and price is the main competing factor.
Process optimization: sellers may be incline to lower prices rather than shut down or reduce output if they wish to maintain an economy of scale. By the same token new processes may make it cheaper to manufacture the same product.
Predatory pricing: A competitor with a healthy bank account may intentionally lower existing prices in an attempt to collapse competition in that market.
Pre-Bankruptcy: Firms near bankruptcy will probably reduce their prices to increase sales volume and provide enough liquidity to survive.
Product competition: A competitor might gain market share by selling a product alternative at a lower price than the established product. This method of breaking into a new market is better than trying to match the prices of those already in the market.
Price discount: Discount pricing takes place when the merchant offers discounts in a variety of forms - quantity, rebates, loyalty rebates, seasonal discounts, periodic or random discounts and other questionable methods.
In financial modeling pricing is one of the four P’s component, the other 3 being product, promotion and place but price is the only revenue generating element among the four Ps, the other 3 belong on the marketing side of the ledger.
Some of the literature available on the subject of pricing includes “The Strategy and Tactics of Pricing”, by Thomas Nagle and Reed Holden outline nine "laws" or factors that influence how a consumer perceives a given price and how price-sensitive they are likely to be with respect to different purchase decisions.