Hope and Ye Shall Find

(Photo: Tom Thai)

I am not an avid runner but I do it pretty regularly because it is good, cheap, easy exercise. I often run in Central Park. The other day on my run there, it was hotter than usual and I ran further than usual, maybe 5 miles. So I really, really wanted to buy an iced coffee when this ordeal was over. I usually tuck a $5 or $10 bill into my running shorts but I’d forgotten. Oh well.

But then, just a few hundred yards from the end of my run I saw on the ground directly in front of me a suspicious little lump of green paper. I stopped. It was money. Three single dollar bills, crisply folded. Just enough for an iced coffee. I was grateful to whoever dropped it and I hoped it didn’t represent their last three dollars.

I was also grateful that I’m not an economist — for if I were, I wouldn’t have stopped to pick up the money because I would have assumed it couldn’t possibly be real money because if it were somebody else would have already picked it up. (This is sometimes referred to as the Efficient Sidewalk Theory.)

Eric M. Jones.

Hey Dube,

That was MINE. Please send it back to me.


I once found a 200 euro bill on the sidewalk when I was a student (I was studying psychology). And surely, consistent with efficient sidewalk theory, I haven't found any money on sidewalks since I started a PhD in economics.

Mike B

I would actually respect any economic who had such faith in efficient markets that they would refuse to pick up money on the ground. It's a good example of practicing what one preaches, which is lacking in so many fields these days.


"Faith" is often just a way to say, "Ignoring all evidence to the contrary" in a manner that makes it sound like actually a good thing.

As for practicing what one preaches, if the practice and the preaching disagree on what reality is, I'd say the goal should be to make both true, not merely both consistent in the same untrue way.

Thus, in this context, pick up the money, acknowledge it's there, and stop "preaching" about how it can't be real.


The reason the investing public has trouble creating an efficient market is that sometimes twenties on the sidewalk of the market take the appearance of litter, litter takes the appearance of twenties and people occasionally empty their pockets of twenties, mistaking them for litter.

The minority of people who can consistently tell the difference make out very well.


"I was grateful to whoever dropped it"- this is an odd use of the term grateful


Actually the efficiency would be the fact that if you'd looked up after seeing the money, you would have seen the person who lost it moving away. That's efficiency. That's economics.

An economist.

Tim F

Somebody else did pick it up....you. If I went to Central Park now those three dollars would not be there anymore. All economics models are usually depicted in equilibrium but in reality economies are never actually at equilibrium but in a constant process of moving towards it. No money on the sidewalk - equilibrium - somebody accidentally drops money – this is an external shock to the market that brings things out of equilibrium - Stephen walks by sees the money and picks it up - market equilibrium restored. No mystery here, if anything this proves the theory.

Alan Gunn

Sidewalks are at least sufficiently efficient to make looking for lost money on sidewalks a poor career choice and probably not even a useful leisure-time activity, absent collateral benefits like getting exercise. Just as trying to pick winning stocks is now a wise investment strategy.


My "sort of" grandma (she was called Grandma by dozens of people with no formal relationship to her) had a sweet take on found money: she said that pennies on the sidewalk must have fallen out of God's pockets, and so needed to be returned to God, in the form of a gift to a poor person.


This version of the Efficient Sidewalk Theory differs from the one I was acquainted with. I’d heard that it is inefficient to pick currency up off the ground. That’s because when you choose to stoop and pick up currency, and later spend it, your actions have two consequences.

First, you enrich yourself – at other’s expense. If you (re-)introduce currency into circulation, the currency competes with other units of currency to attract goods and services. That is, you benefit by diluting the value of everyone else’s currency. Society as a whole is no better off. Thus, your good fortune must have come at the expense someone – and, in this case, pretty much everyone – else.

Second, you also destroy something with actual economic value: the labor you expend in stooping and retrieving the currency.

Thus, someone truly concerned with efficiency – that is, with maximizing society’s welfare – would not stoop to pick up currency (unless he were picking up garbage.)



This is interesting. I had never heard of the Efficient Sidewalk Theory, but it makes lots of sense. In truth, if you see money on the sidewalk, it would be smartest to assume that it was fake, because money rarely can be gotten for free. Also, people will play tricks with money. The dollar on a fishing string comes to mind.

Roger Abramson

If you'd needed $100 for your coffee, it's not impossible that you'd be alerted to the suspicious glint of a diamond earring others disregarded and disbelieved. The hundred trillion synapses in your brain have roughly the calculation speed of a billion dollar supercomputer, especially when you want an iced coffee. Napoleon Hill's Think and Grow Rich is full of anecdotes like yours. I really wish somebody would do a test to turn such anecdotal evidence into useful science to prove or disprove the little-known power of the subconscious mind. Subject success itself to the rigors of the scientific method. But I haven't read Gladwell's "Outliers" yet. Maybe it has.