Nachman, a graduate student at UCLA, is persuaded by his friend to write a paper on metaphysics for Ali, a wealthy student on the outs with his Beverly Hills family and in desperate need of money. Somewhat reluctantly, Nachman dives into research for the paper and finds it surprisingly interesting.
Before Nachman begins to write, Ali takes him out for dinner. He shows off his luxurious lifestyle with a limo and expensive wine, and rents out a whole room in an upscale restaurant. Nachman is overwhelmed by the sense that Ali is taunting him, flaunting what he has that Nachman does not.
On the phone with his friend the next day, Nachman tells his friend they will split the money 50/50. However, Nachman never writes the paper, though he tells Ali he mailed it. Ali's girlfriend Sweeny comes by Nachman's place to ask him for the paper. She confides in him about how Ali uses her to get them out of scrapes, and Nachman finds himself attracted to her.
The next day, Nachman goes to the post office and inquires after a letter sent by him to Ali. Over the next weeks, Nachman goes to post office regularly. He seemingly believes his own lie that he mailed the paper, despite the fact that he has no memory of ever writing it.