I’m not sure about the transition from A to B; it implies that, given that you’re alive, the probability of the coin having come up heads was 99%. (I’m not saying it’s wrong, just that it’s not immediately obvious to me.)
At B, if tails comes up (p=0.5) there are no blues—if heads comes up (p=0.5) there are no reds. So, depending only on the coin, with equal probability you will be red or blue.
It’s not unreasonable that the probability should change—since it initially depended on the number of people who were created, it should later depend on the number of people who were destroyed.
I’m not sure about the transition from A to B; it implies that, given that you’re alive, the probability of the coin having come up heads was 99%. (I’m not saying it’s wrong, just that it’s not immediately obvious to me.)
The rest of the steps seem fine, though.
Pr(heads|alive) / Pr(tails|alive) = {by Bayes} Pr(alive|heads) / Pr(alive|tails) = {by counting} (99/100) / (1/100) = {by arithmetic} 99, so Pr(heads|alive) = 99⁄100. Seems reasonable enough to me.
At B, if tails comes up (p=0.5) there are no blues—if heads comes up (p=0.5) there are no reds. So, depending only on the coin, with equal probability you will be red or blue.
It’s not unreasonable that the probability should change—since it initially depended on the number of people who were created, it should later depend on the number of people who were destroyed.
It doesn’t matter how many observers are in either set if all observers in a set experience the same consequences.
(I think. This is a tricky one.)