That may not be the intention, but if they're empowered to create ad hoc exceptions to CEV, that could end up being the effect.
You seem to be imagining the subjects of the CEV acting as agents within some negotiating process, making decisions to steer the result to their prefered outcome. Consider instead that the CEV is able to ask the subjects questions, which could be about the fairness (not the impact on the final result) of treating a subject of the larger CEV in a certain way, and get honest answers. If your thinking process has a form like "This would be best for me, but that wouldn't really be fair to this other person", the CEV can focus in on the "but that wouldn't really be fair to this other person". Even better, it can ask the question "Is it fair to that other person", and figure out what your honest answer would be.
Basically, my problem is that you're proposing to fix to a (possible) problem with CEV, by using CEV.
No, I am trying to solve a problem with CEV applied to an unknown set of subjects with a CEV applied to a known set of subjects.
All you're really doing is substituting one problem for another: the problem of who would be the "right" people to choose for the initial bootstrap. Thats a Really Hard Problem, and if we knew how to solve it, then we wouldn't really even need CEV in the first place - we could just let the Right People choose the FAI's utility function directly.
The problem of selecting a small group of subjects for the first CEV is orders of magnitude easier than specifying a Friendly utility function. These subjects do not have to write out the utilty function, or even directly care about all things that humanity as a whole cares about. They just have to care about the problem of fairly weighting everyone in the final CEV.
If your thinking process has a form like "This would be best for me, but that wouldn't really be fair to this other person", the CEV can focus in on the "but that wouldn't really be fair to this other person". Even better, it can ask the question "Is it fair to that other person", and figure out what your honest answer would be.
I think this is an even better point than you make it out to be. It obviates the need to consult the small group of subjects in the first place. It can be asked of everyone. When this question is ...
It’s the year 2045, and Dr. Evil and the Singularity Institute have been in a long and grueling race to be the first to achieve machine intelligence, thereby controlling the course of the Singularity and the fate of the universe. Unfortunately for Dr. Evil, SIAI is ahead in the game. Its Friendly AI is undergoing final testing, and Coherent Extrapolated Volition is scheduled to begin in a week. Dr. Evil learns of this news, but there’s not much he can do, or so it seems. He has succeeded in developing brain scanning and emulation technology, but the emulation speed is still way too slow to be competitive.
There is no way to catch up with SIAI's superior technology in time, but Dr. Evil suddenly realizes that maybe he doesn’t have to. CEV is supposed to give equal weighting to all of humanity, and surely uploads count as human. If he had enough storage space, he could simply upload himself, and then make a trillion copies of the upload. The rest of humanity would end up with less than 1% weight in CEV. Not perfect, but he could live with that. Unfortunately he only has enough storage for a few hundred uploads. What to do…
Ah ha, compression! A trillion identical copies of an object would compress down to be only a little bit larger than one copy. But would CEV count compressed identical copies to be separate individuals? Maybe, maybe not. To be sure, Dr. Evil gives each copy a unique experience before adding it to the giant compressed archive. Since they still share almost all of the same information, a trillion copies, after compression, just manages to fit inside the available space.
Now Dr. Evil sits back and relaxes. Come next week, the Singularity Institute and rest of humanity are in for a rather rude surprise!