In the indifference formalism the agent in selecting A1 act like a UN agent that believe that the shutdown button will not be pressed, therefore it create perverse incentives to “manage the news”. Which means that if the agent can cause his shutdown button to be pressed in the event of bad news, it will.
My formulation avoid this pathological behavior by instead making the agent select A1 as if it was a UN-agent which believed that it would continue to optimize according to UN even in the vent of the button being pressed which avoid the perverse incentives to “manage the news”, while still not having any incentives to avoid the button being pressed because the agent will act like it believe that pressing the button will not cause it to initiate a shutdown.
Firstly, the important part of my modification to the indifference formalism is not about conditioning on the actual o but it’s the fact that in evaluating the expectation of UN it take the action in A2 (for a given pair (a1,o)) which maximize UN instead of the action which maximize U (note that U is equal to US in the case that o is not in Press.).
Secondly an agent which chose a1 by simply maximizing E[UN | NotPress; a1] + E[US | Press; a1] do exhibit pathological behaviors. In partcular, there will still be incentives to manage the news, but from both sides now (there is an incentive to cause the button to be pressed in the event of an information which is bad news from the point of view of UN and incentives to cause the button to not be pressed in the events of information which is bad news from the point of view of US.