Epistemic status: speculative
Choice is bad I want to focus on one aspect of this badness: regret. I'm going to argue that increased choice predictably increases the amount of regret that an agent feels, even if they are actually better off, and that this is bad for humans in particular.
Suppose that John is an uneducated child of subsistence farmers. Then John has a very limited set of options available to him (his "choice set") - work at his parents' farm, work at someone else's farm in the village, start his own farm... and that's about it. While John might prefer to be a lawyer, the fact that he was unable to become one does not reflect badly on him , since it was just not an available option. Given the limited set of alternatives, John ends up taking over the family farm (gaining 100 utils of satisfaction), and is quite satisfied with himself (starting his own farm being the best option at 110 utils).
Now, suppose that Kim is an educated child of farmers (with exactly the same preferences as John). Kim could still become a farmer, but also has some new, intriguing possibilities as a clerk, or clergyman, or a lawyer. Some of these options are much better than becoming a farmer, but it is increasingly unclear how to reach them. Kim ends up becoming a clerk (gaining 150 utils of satisfaction), but is mildly dissatisfied (becoming a lawyer being the best at 200 utils).
Now, suppose Liam is an educated child of professionals in the developed world (with the same preferences as John and Kim). Liam has many options far better than being a farmer or a clerk, including some that seem vastly better but are hard to acquire (the best is starting a spaceship company). Liam ends up being a well-paid software developer (gaining 300 utils of satisfaction), but is perennially dissatisfied with his choices (spaceship company CEO being the best at 1000 utils).
John, Kim, and Liam have the same preferences, and they each satisfy them progressively more. But Liam has the most regret, despite having done best. What's going on?
Well, first of all I've been casually using this word "regret" without really saying what I mean. Let's assume for the moment that "regret" works a bit like it works in decision theory: an individual's regret about a decision is the difference between the best option (post facto) and the option that they actually took. So John has regret 10, Kim has regret 50, and Liam has regret 700.
This concept of regret is a useful one because minimizing regret is dual to maximizing value (for any fixed $X$, minimizing $X - V$ is the same as maximizing $V$). Moreover, regret makes a handy summary of how good your past decisions were, how much they deviated from optimal. So you can get a long way as a regret-minimizer.
But are humans regret-minimizers? I doubt that we are entirely , but people certainly do find regret very aversive, so it's hard to deny that it plays some part in our decision process. So let's hypothesize that humans are at least partly regret-minimizers.
But what does a regret-minimizer feel like from the inside? For a regret-minimizer, regret is bad, and it's going to feel worse the more regret it has. Operationally, this works just as well as making it feel good in proportion to how much value it has, but subjectively the experience is quite different.
This already seems somewhat cruel, but we should also expect that the absolute amount of regret that an agent feels is going to be larger the larger their choice set (even though their actual outcome should actually be better). Buyer's remorse is worse the more options there are!
This is not a sure thing: if the new additions to the choice set are very easy to acquire, then the regret may go down (consider the degenerate case where there is no uncertainty). But even if you always manage to get an option within 5% of the best, the absolute size of that difference will still be bigger in a bigger set of choices. And in fact our world seems to lean towards high-uncertainty high-payoff options in the tails, which are especially bad.
(There's something weird about this - the world hasn't changed when the choice set expands. There was always someone off being a lawyer while John was a farmer, but because that wasn't an option that was open to him, we're not counting it as part of his regret. Let's call the equivalent of regret but for all options "envy" (I suppose this is technically unbounded if you envy God, but whatever). Then John has (at least) 1000 units of envy (since he envies the lawyer), but this isn't regret because he can't do anything about it. Regret is the bit of envy that you blame on yourself. Increasing your choice set converts all that envy into regret.)
Earlier I suggested that regret minimization doesn't behave differently to value maximization in terms of outcomes. That's true... unless your agent gradually shuts down and becomes less effective when its regret gets too high (how the algorithm feels is not an epiphenomenon in this case!). Evolution won't save you: the best it can do is make sure that your regret thresholds are well-calibrated for the ancestral choice environment. Which looks a lot more like John's than Liam's. Even worse, since we actually care about what it's like to be our algorithm, we are not neutral between the two choices. Being a value-maximizer seems subjectively better than being a regret-minimizer.
High regret doesn't only make people sad in retrospect, it can also make them sad in prospect. If you are assessing options based on expected regret, then as a regret-minimizer you're still going to feel bad about an option that is high in expected regret (even if it is the lowest of the set). That's what it's like to want to minimize regret. That might manifest as a sense of hopelessness, despair, or a feeling that the all the options are bad.
Putting it together we get a sad just-so story: humans evolved to be partially regret-minimizers because that worked fine at the time. But our choice set has expanded rapidly, and especially at the tails, which means our absolute levels of regret are climbing, along with our performance.
I have no idea what we do about this, other than try and think like a value-maximizer rather than a regret-minimizer ("don't compare yourself to other people"). Suggestions welcome.