While Jerry and Elaine are at a restaurant, a valet parking attendant with body odor leaves Jerry's car with a lingering smell. The external costs are large: the smell attaches itself to Jerry and Elaine, who have to resort to costly measures to cleanse themselves. Jerry attempts to recoup some of the damage by cleverly bargaining with the restaurant owner to cover the cost of cleaning the car. In the end, the cleaning is not enough, and Jerry leaves the car and keys in plain sight hoping it will be stolen, in which case the insurance company will bear the loss.
Jerry accompanies Elaine to a piano bar. He meets a girl he likes at the dinnertable, as a piano plays in the background. She asks, "How much do you suppose it'd take to get him to stop?" Jerry says, "I'm in for $5." She replies, "I'll supply the hat." This is a private solution to the externality.