Social exchange theory proposes that social behavior is the result of exchanges and that people seek to minimize their costs while maximizing benefits.

This theory is unique because instead of measuring relationships with emotions, it uses logic and mathematics. It has applications in many areas, including in romantic relationships and workplace dynamics.

Costs and Rewards

In social exchange theory, rewards are anything gratifying. Depending on the nature of the relationship, this could be love, money, respect, or status.

Any punishment or loss is a cost. These can include a tangible loss like or the loss of time or wasted effort. The theory proposes that, in every relationship, people weigh the costs and rewards, compare them to other relationships, and keeps the most beneficial ones.


Core Assumptions

Social exchange theory operates on four core assumptions about people, choices, and relationships.

  • The first is that people are motivated by their own interests.
  • Second, that people feel limited by their choices.
  • Third, that humans are rational beings capable of making decisions.
  • And, fourth, that social relationships include elements of reciprocity and interdependence.


Deprivation-Satisfaction Proposition

Researchers study the deprivation-satisfaction proposition of social exchange theory. One study looked at whether physicians receiving gifts from patients affects the quality of their online consultations.

The deprivation-satisfaction proposition suggests the more often a person has received a reward in the recent past, the less value additional rewards of the same nature have. For example, in this study, researchers theorized that if a doctor receives gifts of equal value from each patient, it is unlikely to affect the quality of care.


Comparison Level Theory

Another aspect of social exchange theory is comparison level theory, which proposes that people accept outcomes based on how they compare to their previous experiences. These outcomes ultimately define what people feel they should receive as rewards from a relationship.

Ultimately, every person decides the minimum reward they are willing to accept. If a relationship does not meet this minimum, the person considers looking elsewhere for one that does.


Origins of Social Exchange Theory

George Homans first published the social exchange theory in 1958. He put together a framework combining basic economic principles with human behavior, proposing that all relationships use cost-benefit analysis to determine if a relationship is worth continuing.

This theory is often applied to romantic relationships and marriage, but it applies to many other types of relationships, too.


In Romantic Relationships

Researchers often apply social exchange theory to romantic relationships, even how it applies to online dating.

One study looked at dating profiles and online behaviors, determining that people were most likely to initiate contact with people who have characteristics that are the same or slightly better than their own. For example, people are more likely to contact someone with an equal or higher level of income or education or people they perceived could provide an acceptable quality of rewards.


In Business

Social exchange theory applies not only to the relationships between two people but between two businesses as well. One analysis theorizes that the four core assumptions apply to business-to-business interactions: commitment and positive interactions over time increase trust between businesses that have a working relationship with one another.


In the Workplace

Researchers have also studied social exchange theory in relation to the workplace. When managers show concern for their employees, employees feel they received acceptable rewards for the time and effort they invest in their work.

Employers and employees have an ongoing social exchange relationship. When employees no longer feel the rewards of a job are worth the cost, they may consider getting a new one.


Gender and Race

There are some criticisms about social exchange theory, particularly concerning gender and race. Some of its applications to marriage are problematic, especially in the modern era.

Gender scholars highlight that men hold a lot of power in heterosexual relationships and are responsible for a relationship progressing to marriage, though this is only applicable to relationships where the woman wants to get married. Other criticisms point out that the theory fails to account for race, particularly the experience of black men and women.


Affect Theory of Social Exchange

The affect theory of social exhange is similar to the social exchange theory, but it focuses on both rational thought and emotions and operates on different assumptions.

The first is that all social exchanges produce emotions that fall on a spectrum of positive to negative. It also assumes that these emotions are internal and that most people choose to create positive emotions and avoid negative ones. Finally, the affect theory of social exchange assumes that emotions caused by social exchanges prompt people to try to understand these feelings and attempt to explain them.


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