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HonoreDB comments on In the Pareto world, liars prosper - Less Wrong
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As Stuart_Armstrong explains to me on a different thread, the decision process isn't necessarily picking one of the discrete outcomes, but can pick a probabilistic mixture of outcomes. (.6,.6) doesn't appear Pareto-optimal because it's dominated by, e.g., selecting (.95, .4) with probability p=.6/.95 and (0,1) with probability 1-p.