Hedonic asymmetries

I'm unsure that "extreme" would necessarily get a more robust response, considering that there comes a point where the pain becomes disabling.

It seems as though there might be some sort of biological "limit" insofar as there are limited peripheral nerves, the grey matter can only process so much information, etc., and there'd be a point where the brain is 100% focused on avoiding the pain (meaning there'd be no evolutionary advantage to having the capacity to process additional pain). I'm not really sure where this limit would be, though. And I don't really know any biology so I'm plausibly completely wrong.

even though evolution doesn't have a concept of a fate being "worse than death" - certainly not worse than the death of your extended family.

But as long as you're alive, evolution can penalize you for losses of 'utility' (reproductive ability). For example:

Loss of a limb:

• is excruciating
• seems likely to decrease ability to reproduce and take care of offspring and relatives - especially in "the evolutionary environment".

The only weird part of this story is the existence of suicide.*

*From a basic evolutionary perspective, it makes more sense in the piece History is Written by the Losers where it is revealed that the man who 'invented history**' in China chose to live rather than commit suicide after being sentenced to castration - an act which was inconceivable at the time. The context in which people would rather commit suicide than avoid other circumstances however, paints a picture of suicide as a social phenomenon. Arguably this might makes sense evolutionarily, but it's a more complicated picture.

"because he was principled enough to contradict the emperor in the presence of his court, Sima Qian was sentenced to castration. This was a death sentence—any self-respecting man of his day would commit suicide before submitting to the procedure. Everyone expected Sima Qian to do so. But in the end Sima Qian decided to accept the punishment and live the rest of his life in shame, because if he did not he would never finish the history he had started."

**The idea of writing things down as they happened so future generations would know. 

"That a great thinker could profitably spend his time sorting through evidence, trying to tie together cause and effect, distinguishing truth from legend, then present what is found in a written historical narrative—it is an idea that seems to have never occurred to anyone on the entire subcontinent. Only in Greece and in China did this notion catch hold."

Perhaps hobbies are areas where people understand this about themselves, albeit narrowly.

And evolution doesn't seem to be likely to "fix" that given some more time.

Why would you suppose that?

We don't behave in a "Malthusian" way, investing all extra resources in increasing the number or relative proportion of our descendants in the next generation. Even though we definitely could, since population grows geometrically. It's hard to have more than 10 children, but if every descendant of yours has 10 children as well, you can spend even the world's biggest fortune. And yet such clannish behavior is not a common theme of any history I've read; people prefer to get (almost unboundedly) richer instead, and spend those riches on luxuries, not children.

Isn't that just due to the rapid advance of technology creating a world in disequilibrium? In the ancestral environment of pre-agricultural societies these behaviors you describe line up with maximizing inclusive genetic fitness pretty well; any recorded history you can read is too new and short to reflect what evolution intended to select for.

I suspect it all comes down to modeling of outcome distributions. If there's a narrow path to success, then both biases are harmful. If there are a lot of ways to win, and a few disasters, then optimism bias is very harmful, as it makes the agent not loss-averse enough. If there are a lot of ways to win a little, and few ways to win a lot, then pessimism bias is likely to miss the big wins, as it's trying to avoid minor losses.

I'd really enjoy an analysis focused on your conditions (maximize vs satisfice, world symmetry) - especially what kinds of worlds and biased predictors lead satisficing to get better outcomes than optimizing.

For example, if the world is symmetric in the appropriate sense in terms of what actions get you rewarded or penalized, and you maximize expected utility instead of satisficing in some way, then the argument is wrong. I'm sure there is good literature on how to model evolution as a player, and the modeling of the environment shouldn't be difficult.

I would think it would hold even in that case, why is it clearly wrong?

I think that the intuition for this argument comes from something like a gradient ascent under an approximate utility function. The agent will spend most of it's time near what it perceives to be a local(ish) maximum.

So I suspect the argument here is that Optimistic Errors have a better chance of locking into a single local maximum or strategy, which get's reinforced enough (or not punished enough), even though it is bad in total.

Pessimistic Errors are ones in which the agent strategically avoids locking into maxima, perhaps by Hedonic Adaptation as Dagon suggested. This may miss big opportunities if there are actual, territorial, big maxima, but that may not be as bad (from a satisficer point of view at least).