When I said "sufficiently small" I was including stuff on the order of "an average of .01 cents total as the result of the policy".
> it fails against its more psychopathic competitors
I see no reason why choosing to lose an expected value of .01 cents total, would result in failing against a competitor which does not do so. That just doesn't make sense. It isn't like there is a ranking of "what company in this field made the most profit", and then all of them other than the top 1 or 2 are immediately destroyed each month. No, a company runs out of business when it is not sufficiently profitable. Now, if something results in their products being more expensive, or something like that, in a way that significantly changes their profitability, or other things which might slightly change their per-unit profitability, then yeah, that could make them non-viable.
But, like,
have you worked in a large company? There are certainly inefficiencies in large companies which are the result of the continued choices of individual employees, even among large successful companies. This is obvious.
Companies are not able to perfectly optimize for profitability, even if they wanted to.