Social exchange theory

Social exchange theory is a sociological and psychological theory that studies the social behavior in the interaction of two parties that implement a cost-benefit analysis to determine risks and benefits. Also, the theory involves economic relationships, it occurs when each party have goods that the other parties value. Social exchange theory suggests that these calculations occur on romantic relationships, friendships, professional relationships and ephemeral relationships as simple as exchanging words with a customer at the cash register. Social exchange theory says that if the costs of the relationship are higher than the rewards, such as a lot of effort or money put into a relationship and not reciprocated, this could lead to issues.During the beginning of this theory, The most comprehensive social exchange theories are those of the American social psychologists John W. Thibaut (1917–1986) and Harold H. Kelley (1921–2003), the American sociologists George C. Homans (1910–1989), Peter M. Blau (1918–2002), Richard Marc Emerson (d. 1982), and Claude Lévi-Strauss (1908–2009). He defined social exchange as the exchange of activity, tangible or intangible, and more or less rewarding or costing between at least two persons. After Homans founded the theory, other theorists continued to write about it, particularly Peter M. Blau and Richard M. Emerson, who in addition to Homans are generally thought of as the major developers of the exchange perspective within sociology. Homans' work emphasized the individual behavior of actors in interaction with one another. Although there are various modes of exchange, Homans centered his studies on dyadic exchange. John Thibaut and Harold Kelley are recognized for focusing their studies within the theory on the psychological concepts, the dyad and small group. Lévi-Strauss is recognized for contributing to the emergence of this theoretical perspective from his work on anthropology focused on systems of generalized exchange, such as kinship systems and gift exchange.Self-interest and interdependence are central properties of social exchange. These are the basic forms of interaction when two or more actors have something of value to each other, and they have to decide whether to exchange and in what amounts. Homans uses the concepts of individualism to explain exchange processes. To him, the meaning of individual self-interest is a combination of economic and psychological needs. Fulfilling self-interest is often common within the economic realm of the social exchange theory where competition and greed can be common. In social exchange, self-interest is not a negative thing; rather, when self-interest is recognized, it will act as the guiding force of interpersonal relationships for the advancement of both parties' self-interest'—Michael Roloff (1981)Thibaut and Kelley see the mutual interdependence of persons as the central problem for the study of social behavior. They developed a theoretical framework based on the interdependence of actors. They also highlighted social implications of different forms of interdependence such as reciprocal control. According to their interdependence definition, outcomes are based on a combination of parties' efforts and mutual and complementary arrangements.Social exchange theory views exchange as a social behavior that may result both in economic and social outcomes. Social exchange theory has been generally analyzed by comparing human interactions with the marketplace. The study of the theory from the microeconomics perspective is attributed to Blau. Under his perspective every individual is trying to maximize his wins. Blau stated that once this concept is understood, it is possible to observe social exchanges everywhere, not only in market relations, but also in other social relations like friendship. Social exchange process brings satisfaction when people receive fair returns for their expenditures. The major difference between social and economic exchange is the nature of the exchange between parties. Neoclassic economic theory views the actor as dealing not with another actor but with a market and environmental parameters, such as market price. Unlike economic exchange, the elements of social exchange are quite varied and cannot be reduced to a single quantitative exchange rate. According to Stafford, social exchanges involve a connection with another person; involve trust and not legal obligations; are more flexible; and rarely involve explicit bargaining.The basis of social exchange theory is to explain social change and stability as a process of negotiating exchanges between parties. These changes can occur over a person's life course through the various relationships, opportunities, and means of support. An example of this is the convoy model of support, this model uses concentric circles to describe relationships around an individual with the strongest relationships in the closet circle. As a person ages, these relationships form a convoy that moves along with the person and exchanges in support and assistance through different circumstances that occur. It also changes through the directionality of support given to and by the individual with the people within their support network. Within this model, there are different types of support (Social support) a person can receive, those being intangible, tangible, instrumental, and informational. Intangible support can either be social or emotional and can be love, friendship and appreciation that comes with valuable relationships. Tangible support are physical gifts given to someone such as land, gifts, money, transportation, food, and completing chores. Instrumental support are services given to someone in a relationship. Finally, informational support is the delivering of information that is helpful to an individual. Ivan Nye came up with twelve theoretical propositions that aid in understanding the exchange theory.Social exchange theory is not one theory but a frame of reference within which many theories can speak to another, whether in argument or mutual support. All these theories are built upon several assumptions about human nature and the nature of relationships. Thibaut and Kelley have based their theory on two conceptualizations: one that focuses on the nature of individuals and one that describes the relationships between two people. Thus, the assumptions they make also fall into these categories.The assumptions that social exchange theory makes about human nature include the following:Social exchange includes 'both a notion of a relationship, and some notion of a shared obligation in which both parties perceive responsibilities to each other'. John Thibaut and Harold Kelley proposed two comparison standards to differentiate between relationship satisfaction and relationship stability. This evaluation rests on two types of comparisons: Comparison Level and Comparison Level for Alternative. According to Thibaut and Kelley, the Comparison Level (CL) is a standard representing what people feel they should receive in the way of rewards and costs from a particular relationship. An individual's comparison level can be considered the standard by which an outcome seems to satisfy the individual. The Comparison Level for Alternative (CLalt) refers to 'the lowest level of relational rewards a person is willing to accept given available rewards from alternative relationships or being alone'. In other words, when using this evaluation tool, an individual will consider other alternative payoffs or rewards outside of the current relationship or exchange. CLalt provides a measure of stability rather than satisfaction. If people see no alternative and fear being alone more than being in the relationship, social exchange theory predicts they will stay.According to Kelley and Thibaut, people engage in Behavioral Sequence, or a series of actions designed to achieve their goal. This is congruent with their assumption that human beings are rational. When people engage in these behavioral sequences, they are dependent to some extent on their relational partner. In order for behavioral sequences to lead to social exchange, two conditions must be achieved: 'It must be oriented towards ends that can only be achieved through interaction with other persons, and it must seek to adapt means to further the achievement of these ends'. The concept of reciprocity also derives from this pattern. The reciprocity principle refers to the mutual reinforcement by two parties of each other's actions. The process begins when at least one participant makes a 'move', and if the other reciprocates, new rounds of exchange initiate. Once the process is in motion, each consequence can create a self-reinforcing cycle. Even though the norm of reciprocity may be a universally accepted principle, the degree to which people and cultures apply this concept varies.Katherine Miller outlines several major objections to or problems with the social exchange theory as developed from early seminal worksThe most extensive application of social exchange has been in the area of interpersonal relationships. However, social exchange theory materializes in many different situations with the same idea of the exchange of resources. Self-Interest can encourage individuals to make decisions that will benefit themselves overall. Homans once summarized the theory by stating:The actors in social exchange are normally viewed as unemotional beings who have information, cognitively process it, and make decisions concerning the pattern and nature of exchange with others. Affect theory of social exchange complements social exchange theory by incorporating emotion as part of the exchange process. Formalized by Lawler (2001), the affect theory examines the structural conditions of exchange that produce emotions and feelings and then identifies how individuals attribute these emotions to different social units (exchange partners, groups, or networks). These attributions of emotion, in turn, dictate how strongly individuals feel attached to their partners or groups, which drives collectively oriented behavior and commitment to the relationship.