SOCIAL EXCHANGE

THEORY
 August 11,1910
A lawyer and a fellow of Harvard
Corporation
Harvard University- English
Literature (1932)
Professor in Sociology (1939-
GEORGE HOMAN 1941)
Naval Officer (1942-1946)
Faculty member (1946-1970)
 February 7, 1918
American Sociologist and Theorist
One of the most influential post-war
sociologists
Professor at Cambridge University in
Great Britain
PETER BLAU Considered as the last grand theorist of
20th century American Sociology
SOCIAL EXCHANGE THEORY
proposes that social behavior is the result of an
exchange process. The purpose of this exchange is
to maximize benefits and minimize costs.
This theory tells that people weigh the potential
benefits and risks of social relationships. When the
risks outweigh the rewards, people will terminate or
abandon that relationship.
 ASSUMPTIONS OF SOCIAL EXCHANGE THEORY BY
HOMAN:

◦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
◦Relationship are interdependent
◦Relational life is a process
ASSUMPTIONS OF SOCIAL EXCHANGE THEORY BY
BLAU:
ₒThe desire for social rewards leads men to enter into
exchange relationships with one another
ₒReciprocal social change creates trust and social
bonds between men
ₒUnilateral services create power and status
differences
ₒPower differences make organizations possible
ₒLegitimate power is require for stable organization
ₒIf subordinates collectively experience unfair
exercise of power, an opposition movement will
develop
How Social Exchange Theory Works?
Most relationships are made up of a
certain amount of give-and-take, but this
does not mean that they are always
equal. Social exchange suggests that it is
the valuing of the benefits and costs of
each relationship that determine whether
or not we choose to continue a social
association.
Costs vs. Benefits
Costs involve things that you see as negatives

The benefits are things that you get out of the relationship

Social exchange theory suggests that we essentially take the

benefits and subtract the costs in order to determine how much a
relationship is worth. Positive relationships are those in which the
benefits outweigh the costs while negative relationships occur when
the costs are greater than the benefits.
Homans summarized the system of social exchange
theory into three propositions

1. Success proposition
2. Stimulus proposition
3. Deprivation
EXPECTATION AND
COMPARISON LEVELS
As people weigh the benefits of a relationship
against the costs of the relationship, they do
so by establishing a comparison level that is
often influenced by social expectations and
past experiences.
Assumptions
It says that humans base their behaviours on rational calculations
designed to maximize individual profit.

Most people value acceptance, loyalty, financial support, affection and

companionship and so we might find it rewarding to be in a relationship
with a person who enhances our social status. This is classified as a
reward.

On the other hand costs arise whenever there is a negative value for an
individual. For instance relationship that cost us time, money and effort
or all the adjustments we make to coordinate with another person.
The net outcome is equal to rewards take away costs.
As with everything dealing with the social exchange theory, it has as its
outcome satisfaction and dependence of relationships. The social-
exchange perspective argues that people calculate the overall worth of
a particular relationship by subtracting its costs from the rewards it
provides.
Worth = Rewards − Costs

If worth is a positive number, it is a positive relationship. On the

contrary, a negative number indicates a negative relationship. The
worth of a relationship influences its outcome, or whether people will
continue with a relationship or terminate it. Positive relationships are
expected to endure, whereas negative relationships will probably
terminate. In a mutually beneficial exchange, each party supplies the
wants of the other party at lower cost to self than the value of the
resources the other party provides. In such a model, mutual
relationship satisfaction ensures relationship stability.
Outcome = Rewards − Costs