The Concept of Social Exchange Theory

“The adjustment one individual makes affects the adjustments the others must make, which in turn require readjustment.” — John Thibaut and Harold Kelley

According to the textbook, the definition of Social Exchange Theory (SET) “is based on the notion that people think about their relationships in economic terms…People tally up the costs of being in a relationship and compare them to the rewards that are offered by being in that relationship.” The researchers associated with this theory are John Thibaut and Harold Kelley.

The key concepts of Social Exchange Theory are based on what could be viewed as a sort of reward system for all parties involved in a relationship. That’s not to say that every person gets an actual award simply for knowing another person or group of people, even though in some certain cases, that could be a part of it. Every human will experience some form of Social Exchange in their life at one moment or another. Whether you’re in elementary school deciding on who to exchange lunches with, or choosing a new partnership for your up-and-coming big time law firm.

Social Exchange exists in even the smallest of interactions and develops throughout our lives into bigger, more important interactions, if you will. The main concept of this theory is essentially that people examine the costs versus the rewards when it pertains to forming, or attempting to form a new or lasting relationship and the worth of that relationship is equal to the rewards minus the costs. If there are more rewards in a relationship, then a person is far more likely to stay in that one rather than a relationship with a lot of costs. People are going to commit to relationships where both parties are equally satisfied with mutual benefits. Much like monetary gain within the economy; when people meet, they exchange a certain level of emotional currency or baggage, if you will. This is not to say that every thriving relationship has only rewards with zero costs, rather just that the rewards of the bond remain higher than the costs. Relationships are an independent process which require work from both sides.

The assumptions that Social Exchange Theory makes about human nature include the following statements:

• Humans seek rewards and avoid punishments.
• Humans are rational beings.
• The standards that humans use to evaluate costs and rewards vary over time and from person to person.