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The experiments were simulated bargaining sessions in which subjects bargained via written offers over the division of a hypothetical 90. Subjects drew a number (break-even point) which indicated the amount they had to exceed in order to make a profit. Written statements about one's break-even point were permitted. Unbeknownst to the subjects, they actually bargained against a programmed opponent. Experiment I involved one-against-one bargaining (bilateral monopoly) with the factors varied being opponent's break-even point statement (honest, dishonest, none) and sex of the subject. During the course of the bargaining, the subject learned the opponent's break-even point and, therefore, the opponent's honesty or dishonesty. Experiment 2 was a bilateral monopoly experiment in which the subject learned the opponent's break-even point before the bargaining began. Subject's break-even point (10, 20, 30) and opponent's comment (honest, dishonest, none) were varied. In Experiment 3 the subject bargained simultaneously with one honest and one dishonest opponent, but was permitted to reach an agreement with only one. In the bilateral monopoly experiments, subjects imitated the opponent's statement (honest, dishonest or none). Neither the final offer nor the frequency of agreement was affected by the opponent's honesty. In the third experiment, subjects usually made no break-even point statement to either opponent. When an agreement was reached, it was more frequently with the honest opponent.

After calculating the values of the prior distribution of the proportion of red chips in the urn, one can take a random sample of chips, with replacement, from the urn. Each observation of a red chip can be recorded as a "success" (s) and each observation of a blue chip as a "failure" (t). If N observations are taken, then N = s + 7, where sand 7, respectively, stand for the number of successes and the number of failures. Now, the new posterior distribution of opinion will also be a beta with parameters p" and q", where