The single-universe prior seems to be tripping people up, and I wonder whether it's truly necessary.
Also, what if the simulation existed inside a larger simulated "moat" universe, but if there is any leakage into the moat universe, then the whole simulation shuts down immediately.
What do you mean by leakage?
If the simulation exists in the moat universe, then when anything changes in the simulation something in the moat changes.
Then if there are dangerous simulation configurations, it could damage the moat universe.
At the recent London meet-up someone (I'm afraid I can't remember who) suggested that one might be able to solve the Friendly AI problem by building an AI whose concerns are limited to some small geographical area, and which doesn't give two hoots about what happens outside that area. Cipergoth pointed out that this would probably result in the AI converting the rest of the universe into a factory to make its small area more awesome. In the process, he mentioned that you can make a "fun game" out of figuring out ways in which proposed utility functions for Friendly AIs can go horribly wrong. I propose that we play.
Here's the game: reply to this post with proposed utility functions, stated as formally or, at least, as accurately as you can manage; follow-up comments explain why a super-human intelligence built with that particular utility function would do things that turn out to be hideously undesirable.
There are three reasons I suggest playing this game. In descending order of importance, they are: