buybuydandavis comments on Some thoughts on meta-probabilties - Less Wrong Discussion
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That was a really good question, and 1) seems like a pretty good answer, but I recommend you look into Jaynes, who went into a little detail on this idea.
See comments below, "Inner and Outer Robots".
http://lesswrong.com/r/discussion/lw/msd/some_thoughts_on_metaprobabilties/crnx