The Concept Of Social Exchange Theory

“The adjustments made by one person affect the adjustments that others have to make. This requires readjustment.” — John Thibaut, Harold Kelley

According to the textbook Social Exchange Theory (SET), is a theory that people see their relationships as economic. People add up the costs associated with a relationship, and then compare these to the rewards. The authors of this theory are John Thibaut & Harold Kelley. Social Exchange Theory can be described as a system of rewards for all those involved in a relationship. It doesn’t mean that every person will receive an award just for being a good friend or acquaintance. However, in certain instances, that may be true. At some point in our lives, every human will have experienced some sort of Social Exchange. You can choose to have lunch with your elementary school friends, or find a partner for your new big-time law firm. Even the simplest interactions can lead to social exchange. This will continue throughout our lives, into more significant interactions. This theory basically states that people should consider the benefits and costs of forming or trying to form a lasting relationship. The value of the relationship will be equal to the rewards less the costs. A relationship that offers more benefits is more likely to be maintained than one with many costs. People will commit to relationships that offer mutual benefits and are equal in satisfaction. Just like the economic gain, people who meet exchange an equal amount of their emotional currency. However, this does not mean that all relationships are free of costs. The rewards of a strong relationship will always outweigh the costs. Each side must work on their relationship.

These statements are the assumptions Social Exchange Theory makes regarding human nature:

The human race seeks out rewards and avoids punishments.

Humans can be rational.

Humans use a variety of standards to evaluate rewards and costs. These standards can vary from one person or another.