I also think that the variant of the problem featuring an actual mugger is about scam recognition.

Suppose you get an unsolicited email claiming that a Nigerian prince wants to send you a Very Large Reward worth $Y. All you have to do is send him a cash advance of $5 first ...

I analyze this as a straightforward two-player game tree via the usual minimax procedure. Player one goes first, and can either pay $5 or not. If player one chooses to pay, then player two goes second, and can either pay Very Large Reward $Y to player one, or he can run away with the cash in hand. Under the usual minimax assumptions, player 2 is obviously not going to pay out! Crucially, this analysis does not depend on the value for Y.

The analysis for Pascal's mugger is equivalent. A decision procedure that needs to introduce ad hoc corrective factors based on the value of Y seems flawed to me. This type of situation should not require an unusual degree of mathematical sophistication to analyze.

When I list out the most relevant facts about this scenario, they include the following: (1) we received an unsolicited offer (2) from an unknown party from whom we won't be able to seek redress if anything goes wrong (3) who can take our money and run without giving us anything verifiable in return.

That's all we need to know. The value of Y doesn't matter. If the mugger performs a cool and impressive magic trick we may want to tip him for his skillful street performance. We still shouldn't expect him to payout Y.

I generally learn a lot from the posts here, but in this case I think the reasoning in the post confuses rather than enlightens. When I look back on my own life experiences, there are certainly times when I got scammed. I understand that some in the Less Wrong community may also have fallen victim to scams or fraud in the past. I expect that many of us will likely be subject to disingenuous offers by unFriendly parties in the future. I respectfully suggest that knowing about common scams is a helpful part of a rationalist's training. It may offer a large benefit relative to other investments.

If my analysis is flawed and/or I've missed the point of the exercise, I would appreciate learning why. Thanks!