Social exchange

Introduction to social exchange principle

Social exchange theory is a sociological and psychological theory that studies the behaviour in the interaction of two parties that implement a cost-benefit analysis to determine risks and benefits [1].

Social exchange theory claims we make decisions like finances or friendships in similar ways. Whether the setting is, we want a good return on our investment, so we do a cost-benefit analysis beforehand. [2]

Set of SETs (Social Exchange Theories)

Technically, “social exchange” is not a single theory but a set of theories. Psychologists and economists of different periods developed models of relationships that one can call “social exchange theories”.

Social exchange theories are derived from economics or behaviourist psychology. For economics, it is about rewards and costs; for behaviour – rewards and punishments. Profit is a primary motivation of economic exchange.

Under these theories, humans are considered as rational creatures who engage in a cost-reward analysis at some level. We weigh the actual and anticipated rewards of building relationships and interpersonal interactions. Simply put, we keep in touch because we expect that to bring us some value now or later.

Origins

Talking about the origins of social exchange theories, researchers usually refer to the names of sociologists Homans (1958) and Blau (1964), and psychologists Thibaut and Kelley (1959).

Homans

One of the earlier models of social exchange is connected with the name of George C. Homans [3]. According to his model, social behaviour is an exchange of goods, material goods but also non-material ones, such as the symbols of approval or prestige. Persons that give much to others try to get much from them, and persons that get much from others are under pressure to give much to them. This process of influence tends to work out at equilibrium to balance exchanges.

Thibaut and Kelley

J. W. Thibaut and H.H. Kelly model [4] says that behaviour is a function of the difference between "rewards" and "costs", that is called outcome. This can be evaluated through several parameters that will be reviewed later in this article.

Blau

Peter M. Blau extends the notions of Homans theory by accenting the impact of social exchange on social norms and structure [5]. For instance, when the person in direct social exchange does that in alignment with general social norms, that might win them the approval of a larger number of community members. That happens due to “reciprocity” to these norms by the people in interactions with others. That can be particularly impactful in the hierarchy of power when a leader sets the interaction scope by compliance with the common welfare values with his subordinates.

Assumptions

There are three main assumptions associated with social exchange theories [6]:

• social behavior is transactional
  An exchange is a transfer of something in return for something else (Roloff, 1981). Social exchange differs from economic exchange. Economic exchange tends to involve contract obligations, but social exchange is voluntary and depends on trust and implicit expectations. The time frame for social exchange is flexible and may not even be agreed beforehand.
  Despite social and economic exchange being different, the distinction border is vague: we might bargain with friends and put trust into economic transactions.
• people seek to minimize their costs and maximize their rewards
  In both economical and relational situations, we choose what we think will be profitable. It is notable that the process of social exchange also involves cognitive and emotional costs, such as mental and physical effort, anxiety, embarrassment, and anger.
• people tend to feel obligated (a debt incurs) when they receive rewards
  Obligations are generated through a series of interactions between parties who are in a state of reciprocal interdependence. For example, when the favor was provided to the person without an immediate cost for them. Another example is organization-employee relationships [7].

Assumptions

According to social exchange principles, people tend to evaluate relationships from the perspective of costs and rewards. And the variables of evaluation might differ between people. For this material, let’s take a look at Thibaut and Kelley’s (1978) social exchange model [8].

The relational outcome concept from Thibaut and Kelley’s theory suggests that people try to predict the outcome of an interaction before it takes place.

The model states that relational outcome is being compared to relational stability and relational satisfaction. Therefore, the relationship is preserved when it is stable and satisfactory to some extent.

Author’s note: technically, relational stability is not a quality to be assessed by the person, it’s rather an observable characteristic. So, it can’t really be “compared” to the outcome and satisfaction. We just stick to the original article’s terminology here.

Relational satisfaction shows how an interpersonal outcome makes a participant feel (happy, sad, angry, excited, etc.) relative to their expectations in general.

Relational stability is a measure of how likely the relationship is to be terminated by one of the parties. 

“Relational stability” and “relational satisfaction” are rather external metrics. These are the consequence of an individual’s decision. Graphically it is the best described as following: person compares their outcomes to expectations and alternatives, and the results of that thinking and actions are relational satisfaction and stability. 

Thibaut and Kelley introduce two parameters that describe the decision of an average person: Comparison Level (CL) and Comparison Level of Alternatives (CL_alt)

CL, CL_alt → 🤔 → 💬 → Relational satisfaction, relational stablity

a) To account for satisfaction, an individual has their own comparison level (CL). A comparison level is an individual’s threshold of an attractive outcome. The history of our relationships influences what comparison levels we set for family ties, friendship, and comradery expectations. Basically, it’s our understanding what’s good and enough for a particular relationship.

b) The second parameter defined by the authors is the comparison level of alternatives, or CL_alt. Not to be confused with CL, the CL_alt represents a person’s choice between relational options at the moment. For instance, what is the best friendship one can find among existing alternatives? Say there is a group of classmates and colleagues, and the person has to pick someone because working alone is a worse alternative.

Conclusion

The behaviour of people in relationships might be described by a social exchange theories. It revolves around rewards and costs of keeping or developing a relationship. These can be both material and emotional. Person tends to evaluate outcomes of every interaction, current and possible. Based on rewards and alternatives available, person decides whether it’s worthy to change the behaviour about a particular relationship.

References

1. https://en.wikipedia.org/wiki/Social_exchange_theory
2. First Look at Communication Theory (Int'. Glenn G. Sparks Em Griffin Andrew M. Ledbetter, Andrew Ledbetter, Glenn Grayson Sparks) - Page 99
3. Homans, G. C. (1958). Social behavior as exchange. American Journal of Sociology, 63, 597–606.
4. Thibaut, J. W., & Kelley, H. H. (1959). The social psychology of groups. John Wiley.
5. Blau, P.M. (1964), Justice in Social Exchange. Sociological Inquiry, 34: 193-206.
6. Braithwaite, D.O., & Schrodt, P. (Eds.). (2021). Engaging Theories in Interpersonal Communication: Multiple Perspectives (3rd ed.). Routledge.
7. Shore, Lynn M., and Kevin Barksdale. "Examining degree of balance and level of obligation in the employment relationship: A social exchange approach." Journal of Organizational Behavior: The International Journal of Industrial, Occupational and Organizational Psychology and Behavior 19.S1 (1998): 731-744.
8. Kelley, H. H., & Thibaut, J. (1978). Interpersonal relations: A theory of interdependence. New York: Wiley.