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solipsist comments on Pascal's Muggle: Infinitesimal Priors and Strong Evidence - Less Wrong
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Yes, privileging a hypothesis isn't discussed in great detail, but the alternatives you mention in your post don't resolve the dilemma. Even if you think that that the probabilities of a "good" and "bad" alternatives balance each other out to the quadrillionth decimal point, the utilities you get in your calculation are astronomical. If you think there's a 0.0000quadrillion zeros1 greater chance that the beggar will do good than harm, the expected utility of your $5 donation is inconceivably greater than than a trillion years of happiness. If you think there's at least a 0.0000quadrillion zeros1 chance that $5 will cause the mugger to act malevolently, your $5 donation is inconceivably worse than a trillion years of torture. Both of theses expectations seem off.
You can't just say "the probabilities balance out". You have to explain why the probabilities balance out to a bignum number of decimal points.
Actually, I don't. I say the probabilities are within my margin of error, which is a lot larger than "0.0000quadrillion zeros1". I can't discern differences of "0.0000quadrillion zeros1".
OK, but now decreasing your margin of error until you can make a determination is the most important ethical mission in history. Governments should spend billions of dollars to assemble to brightest teams to calculate which of your two options is better -- more lives hang in the balance (on expectation) than would ever live if we colonized the universe with people the size of atoms.
Suppose a trustworthy Omega tells you "This is a once in a lifetime opportunity. I'm going to cure all residence of country from all diseases in benevolent way (no ironic or evil catches). I'll leave the country up to you. Give me $5 and the country will be Zimbabwe, or give me nothing and the country will be Tanzania. I'll give you a couple of minutes to come up with a decision." You would not think to yourself "Well, I'm not sure which is bigger. My estimates don't differ by more than my margin of error, so I might as well save the $5 and go with Tanzania". At least I hope that's not how you'd make the decision.