Exchange theory

Social exchange theory is a social psychological and sociological perspective that explains social change and stability as a process of negotiated exchanges between parties. Social exchange theory posits that human relationships are formed by the use of a subjective cost-benefit analysis and the comparison of alternatives. The theory has roots in economics, psychology and sociology. Social exchange theory features many of the main assumptions found in rational choice theory and structuralism. It is also used quite frequently in the business world to imply a two-sided, mutually contingent and rewarding process involving transactions or simply exchange.

Social exchange theory goes back to Thibaut and Kelley (1959), Kelley and Thibaut (1978), Homans (1961) and Rusbult (1983). Sociologist George Homans published a work "Social Behavior as Exchange". He defined social exchange as the exchange of activity, tangible or intangible, and more or less rewarding or costly, 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.

Homans summarizes the system in three propositions: success, stimulus, and deprivation–satiation proposition.

Peter Blau focused his early writings on social exchange theory more towards the economic and utilitarian perspective, whereas Homans focused on reinforcement principles which presuppose individuals base their next social move on past experiences. Blau's utilitarian focus encouraged the theorist to look forward, as in what they anticipated the reward would be in regards to their next social interaction. Blau felt that if individuals focused too much on the psychological concepts within the theory, they would refrain from learning the developing aspects of social exchange. Blau emphasized technical economic analysis whereas Homans concentrated more on the psychology of instrumental behavior.

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