You are asking a great question that will draw many answers. I can provide you with some general ideas, however your agent should help you tailor them to your situation
1. The rule of thumb is market time equals market price. If you have market time to sell (meaning you are not "having to sell quickly") you should be able to sell your home for market price. "Market price" is the price an able and willing buyer will pay for your home in market time. So the buyer sets the selling price, you and your agent set the "List price".
2. The list price is normally determined by you and your agent reviewing the comparable properties that are:
Recently Sold, Expired, Pending, and Active.
If there is disagreement regarding the probable sales price, I take my clients to view similar homes, so they are acclimated to how a buyer views a home. The best list price is within 5% of the selling price (plus or minus 2 1/2 percent.
3. A properly prepared and priced property, marketed by a competent agent, will result in the most activity within the first four weeks on the market. Depending upon the market, it may be only two weeks.
My rule of thumb is ten showings or two offers in three weeks. If you are getting no showings, the price is too high. If you are getting showings but no offers, the price is too high.
4. Your agent should be asking agents that show the home for buyer feedback. The buyer feedback, along with a market update, should be discussed every 7-14 days. The number of new listings, the number going into escrow, the number SOLD, and the number of listings that expire.
So if there are other properties selling, in like condition and price, and your property isn't, then you should probably lower your price.
However, there are other factors that contribute to a lack of offers. Assuming you have showings and have buyer agent feedback, you should know what they problem is. Most homes are not staged very well, so depending upon the length of time you've been on the market it might be time for an overhaul:
a) Pull it off the market
b) Paint the front of the house
c) Plant flowers in front
d) Re-stage the house, rent a storage unit, get everything that can be removed out.
e) Hire a professional home stager if warranted.
f) Re-shoot the photos, do a virtual tour.
(There are homes selling sight unseen with only virtual tours).
g). Look on Realtor.com, trulia, see how your home looks.
h). Do a mailing announcing the re-listing of your home to 200 neighbors (you agent should have done this already), inviting them to the open house. about 35% of the time a neighbor recommends the buyer.
Summary: What you paid, how much you need, how much remodeling you've done, has got nothing to do with what a buyer will pay.
The buyer will pay market value.
One more thing, in most cases increasing the commission to the selling office is less expensive than a price reduction. In California over 85% of the time an agent brings the buyer, so you need to motivate the agents to show your home.