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Decius comments on Simulate and Defer To More Rational Selves - LessWrong
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It looks like you are saying that both rational and irrational agents model competitors as behaving in the same way they do.
Is that why you think that an irrational simulation of a rational agent must be wrong, and why a rational simulation of an irrational agent must be wrong? I suggest that an irrational agent can correctly model even a perfectly rational one.