Here's what I mean, roughly expressed. Two possible timelines.
(A)
2010 Bob wants 2010 Bob to exist, 2011 Bob to exist, 2012 Bob to exist, 2013 Bob to exist.
2010 Alice wants 2010 Alice to exist, 2011 Alice to exist, 2012 Alice to exist, 2013 Alice to exist.
2010 average utility is therefore (4x7 + 4x6) / 2= 26 and that also remains the average for the whole timeline.
(B)
2010 average utility is: 4x7 +6 = (4x7 + 1x6)/2 = 17
2011 average utility is: 4x7 = 28
2012 average utility is: 4x7 = 28
2013 average utility is: 4x7 = 28
So Bob's death increased the average utility indicated in the preferences of a single year. But average utilty across the timeline is now (28 + 6 + 28 + 28 + 28) / 5 = 23.6
In short the average utility of the timeline as a whole is decreased by taking out Bob.
You are averaging based on the population at the start of the experiment. In essence, you are counting dead people in your average, like Eliezer's offhanded comment implied he would. Also, you are summing over the population rather than averaging.
Correcting those discrepancies, we would see (ua => "utils average"; murder happening New Year's Day 2011):
(A) 2010: 6.5ua; 2011: 6.5ua; 2012: 6.5ua; 2013: 6.5ua
(B) 2010: 6.5ua; 2011: 7.0ua; 2012: 7.0ua; 2013: 7.0ua
The murder was a clear advantage.
Now, let's say we are using procreation instead of ...
I said this in a comment on Real-life entropic weirdness, but it's getting off-topic there, so I'm posting it here.
My original writeup was confusing, because I used some non-standard terminology, and because I wasn't familiar with the crucial theorem. We cleared up the terminological confusion (thanks esp. to conchis and Vladimir Nesov), but the question remains. I rewrote the title yet again, and have here a restatement that I hope is clearer.
Some problems with average utilitarianism from the Stanford Encyclopedia of Philosophy:
(If you assign different weights to the utilities of different people, we could probably get the same result by considering a person with weight W to be equivalent to W copies of a person with weight 1.)