One of the probabilities that's being used here is actually the probability that something is possible, and I think that needs to be taken into account.
Let's structure this as a game, and allow you infinite tries to win the prize. You've set the probability of winning at some insanely small fraction of a percent, but that doesn't matter because you have infinite time. Given enough plays, you should win the prize, right?
Not necessarily. Let's say that if the game is possible to win, there is a 99.99% chance of winning, and that the relevant probability in calculating the chance of winning is whether the game is winnable. In that situation, you could play the game infinitely and still lose. In the same way, you could take up this offer infinite times and never win 1,000 quadrillion happy days.
Because of this, if one of the probabilities is that something has a low chance of existing, you shouldn't play the game.
Related to: Some of the discussion going on here
In the LW version of Pascal's Mugging, a mugger threatens to simulate and torture people unless you hand over your wallet. Here, the problem is decision-theoretic: as long as you precommit to ignore all threats of blackmail and only accept positive-sum trades, the problem disappears.
However, in Nick Bostrom's version of the problem, the mugger claims to have magic powers and will give Pascal an enormous reward the following day if Pascal gives his money to the mugger. Because the utility promised by the mugger so large, it outweighs Pascal's probability that he is telling the truth. From Bostrom's essay:
As a result, says Bostrom, there is nothing from rationally preventing Pascal from taking the mugger's offer even though it seems intuitively unwise. Unlike the LW version, in this version the problem is epistemic and cannot be solved as easily.
Peter Baumann suggests that this isn't really a problem because Pascal's probability that the mugger is honest should scale with the amount of utility he is being promised. However, as we see in the excerpt above, this isn't always the case because the mugger is using the same mechanism to procure the utility, and our so our belief will be based on the probability that the mugger has access to this mechanism (in this case, magic), not the amount of utility he promises to give. As a result, I believe Baumann's solution to be false.
So, my question is this: is it possible to defuse Bostrom's formulation of Pascal's Mugging? That is, can we solve Pascal's Mugging as an epistemic problem?