Tim, when dreaming, one has a generic delusion, i.e. the background assumption that one is awake, and a specific delusion, i.e. the particular content of one's dream. But given we're constructing a FAQ of ideal rational agency, no such radical scepticism about perception is at stake - merely eliminating a source of systematic bias that is generic to cognitive agents evolved under pressure of natural selection. For sure, there may be some deluded folk who don't recognise it's a bias and who believe instead they really are the centre of the universe - and therefore their interests and preferences carry special ontological weight. But Luke's FAQ is expressly about normative decision theory. The FAQ explicitly contrasts itself with descriptive decision theory, which "studies how non-ideal agents (e.g. humans) actually choose."