J.M.C. HUTCHINSON 2005. Is more choice always desirable? Evidence and arguments from leks, food selection, and environmental enrichment. Biological Reviews 80:73–92.
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Update
A book on this topic came out too late to incorporate in the paper:
Schwartz, B. 2004. The Paradox of Choice: Why More is Less. New York: Ecco.
There has been much recent work in psychology following up Iyengar & Lepper's (2000) paper. For two excellent reviews see Scheibehenne, Greifeneder & Todd (2009) and Scheibehenne, Greifeneder & Todd (2010); their research calls into question how generally more choice is demotivating in humans. In particular, choice is motivating if we assess quantity of consumption (rather than whether or not consumption occurs).
Jiguet & Bretagnolle (2006) provide data on little bustards implying that larger leks are less attractive than ones of intermediate size.
A paper providing an avenue into later work critical of the Jacoby school is: Malhotra, N.K. 1984. Reflections on the information overload paradigm in consumer decision making. Journal of Consumer Research 10: 436–440.
Dall & Cuthill (1997) discuss various information costs of generalism, some of which may imply advantages in not having a diversity of items to choose from.
Jeschke & Tollriani (2007) review the occurrence of the confusion effect, and find that visually searching predators more often show the effect if the prey is agile: this is more suggestive of the perceptual system becoming overloaded than of difficulty in choosing between similar prey.
Bergvall et al. (2007) discuss negative contrast as a psychological constraint that would stimulate consumption in the presence of a greater diversity of food types.
The Coolidge effect describes the ability to become sexually excited with a new mate even though satiated with another. Dewsbury's review (1981, Psychological Bulletin 89: 464–482) suggests that experiments have mostly examined an effect of sequential variety, rather than of simultaneous choice. In the few experiments in which simultaneous choice was allowed, there was no comparison with a situation of no choice. Still, the opportunity seems there for some relevant experiments.
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