Our current favored cosmological theories allow for the striking and controversial possibility that the observable universe is just a small part of a much larger universe in which parameters that describe the effective, low-energy laws of physics vary from one region to another. The controversy is largely driven by the fact that such a “very large universe” is mostly observationally inaccessible to us, so the issue arises of how we can reasonably assess a theory that describes such a universe. In this paper, we propose a Bayesian method for theory assessment based on theory-generated probability distributions for our observations. We focus on the principles that define this method, leaving aside concerns about how, in practice, one would carry out the required calculations. (One important issue that we set aside is the measure problem.) We argue that cosmological theories can be tested by the standard method of Bayesian updating, but we need to use theoretical predictions for “first-person” probabilities—that is, probabilities that we should use for our observations, taking into account all relevant selection effects. These selection effects can vary from one observer to another and can vary with time, so, in principle, first-person probabilities are defined for each observer instant—an observer at a specific instant of time. Calculations of first-person probabilities should take into account everything that the observer believes about herself and her surroundings, which we refer to as her subjective state. If the universe is very large, a theory might predict that there are many observer instants in the same subjective state; we argue that first-person probabilities should be calculated using a principle of self-locating indifference (PSLI), the assumption that any real observer should make predictions for her future as if she were chosen randomly and uniformly from the theoretically predicted observer instants that share her subjective state. We believe the PSLI is intuitively very reasonable, but we also argue that, if the theory is correct, the use of this principle maximizes the expected fraction of observers who will make correct predictions. A further complication is that cosmological theories are not expected to fully predict the detailed properties of the universe, but rather will predict a set of possible universes, each with a probability. Different possible universes will generically have different numbers of observers. We argue that, in the calculation of first-person probabilities, the probability for each possible universe should be weighted by the number of observer instants in the specified subjective state that it contains. These issues have been controversial in the literature, so we also provide a rebuttal to the claim that principles like the PSLI involve a “selection fallacy”; a rebuttal to what we dub the principle of required certainty; an argument rejecting theories that predict a preponderance of Boltzmann brains; a rebuttal to a parable about humans and Jovians used by Hartle and Srednicki to argue that assumptions of typicality can lead to absurd consequences; and, finally, a discussion about how the use of “old evidence” can be fit into a Bayesian mold.

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• Anthropic considerations
• Cosmology
• Inflation