Assumptions about the rationality of the participants can become extremely complex.
But that is my entire point I didn't have to make those assumptions because the conditional probability of losing 1% to the unknown is so much greater than the conditional probability of losing 50% to the unknown, so that is clearly the inferior risk in an ambiguous specification (which might actually be the captain's information set).
Ah, that's one way to look at it. I assumed from the way the puzzle was presented that any interpretation that involved probabilities was not be considered. Just because that seems to be the cultural norm for such questions. I think IQ tests are more about culture + a decently high bar for IQ, than a direct measure of anything. That is, over a certain number what they're really measuring is how clued in you are to the tacit assumptions of academic/mathematical/mind-puzzle culture. Kind of like I can usually predict how highly a LessWrong.com comment will be upvoted almost solely on how LessWrongian it sounds, regardless of actual content.
By the way, it seems that I, too, never sleep:
Some of us just have very irregular sleep schedules. I've been up all night and it is now 8am in Japan, and I'm about to do 4 hours a work if I can just get break out of the Bitcoin news cycle.
No, you have the sleep slope too. Wrap it around end to end like we do with finite fields.
I'm ignoring the time x-axis location because we're all from different time zones.