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Chase Pack
Communication Final
Comm2050-400-F16
Social Exchange Theory Analysis
Introduction
Have you ever been in a circumstance where you asked someone on a date and had to wait for
the outcome? When this occurs you are going about what is known as the social exchange theory,
we set comparison levels with many people in our lives from our friends, to those at work. In
dating the ratios of costs to benefits comes at stake, this occurs after what is known as the
Comparison level. You see when asking a person out you began the process of comparing and
seeing if it would be a good idea to ask the person out on a date. Then the person you asked
determines another part of the social exchange theory, which compares current position with
alternative routes, whether to accept or decline the offer of the date. This is what we will be
exploring is how the social exchange theory helps us in our daily lives, and how it is used a in
depth look at the social exchange theory.
Theory Definition and Approaches
The Social Exchange Theory is a social psychological perspective, you can find roots of the
theory in economics, sociology, and psychology. The theory was established first by George
Homans, his work was brought to the attention of society in 1958 called Social Behavior as
Exchange. Mr. Homan explained that the theory was an exchange of activity that brought out a
positive or negative reward, however this could only take place when associated between two or
more people. The theory gives the meaning for interpreting society and the series of interactions
that people have between one another (Lioukas & Reuer,2015). These interactions lead to either
rewards or punishment due to the exchange between people. This theory can most often be used
to explain trust in the relationships with friends, family, or even those you associate with
throughout your daily life. The key concept of the social exchange theory is the Rewards and
costs; this forms the majority of social exchange theories as it is determined what is to come of
the exchange. Once the rewards and costs are explored one goes on to do what is called a
comparison level, this ties into the rewards as the person seeks to understand what they should
get from the relationship. After this is accomplished one finds himself determining a series of
actions in order to achieve a goal in the relationship or say a behavioral sequence. Another key
part of social exchange theory is should the relationship continue in which you started or not, this
is called an outcome. A good example of this is debating on leaving your current job and seeking
out another, after youve created a comparison level and alternative you go about deciding the
outcome in which will benefit you the most. There are also three propositions in which Homans
summarizes about the theory they are success, stimulus, & deprivation.
1. Success proposition: suggests that if a person is rewarded for their actions, they are more
likely to repeat the action.
2. Stimulus proposition: suggest that when a particular stimulus has resulted in a reward of
the past, the more prone the person will respond or acknowledge it.

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3. Value proposition: the more valuable a person is to someone, the more chances of that
person performing action.
4. Deprivation proposition: the more frequent a person receives a reward, the less valuable
the unit of the reward becomes.
5. Aggression approval proposition: This occurs when a persons action doesnt receive the
reward he/she anticipated, or gets punishment that was not expected. The result leads to
anger, and is more likely to use aggressive behavior.
The propositions by Homans were created in order to assist in structuring individuals behavior
based off the rewards and costs.
The propositions imply to us the past history of humans makes a creates a difference to our
behavior. And when we discuss past it isnt stating the recent past, but the past of long ago. A
persons past of success, of the acquisition of values have a major effect on the way in which we
behave today. The choices you made in the past could very well be limiting the opportunities
available for you today (Jovanovich, H.B. 1982).
Current Theory Status
In todays world we can still see the use of social exchange theory throughout our lives. This
theory is probably one of the most used and broadest theories as it has a lot to do with
relationships between one another.
There are many recent articles of research on the theory and key examples that portray the
context and approaches of the theory, one in particular that is seen as a modification for the
business world called LMX or Leader-Member exchange. This theory piggybacks off of the
social exchange in a sense, however it is a focus on the relationship solely between the leaders of
a business and its followers.
It goes to show the exchange of relationships in a work environment and how they affect
performance, decisions, and even responsibilities. Like social exchange the leader goes about
viewing the costs and rewards with each employee and creates the trust depending on the verdict
of benefits in which the leaders see in that employee (Graen,1968). Even though there are
theories picked off from the social exchange they go about using similar traits of the social
exchange theory. Even though the theory can have been used in a broad scale and seen quite
often in psychology and the business world, it is mainly used by sociology with the perspective
on relationships.

Social Exchange Theory Evaluation

This theory is a great one, as it becomes used often throughout our daily lives and has gained a
recognition. The social exchange theory has been able to withstand the test of time; we see many
researchers in the past and today use the theory. In 1970s UW sociologists Richard Emerson and
Karen Cook went in depth on the theory and applied a series of experiments. One of the first
tests was with social power and equity in exchange networks, they elaborated on the subject by

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factors and constraints which affected the use of power in a simulation of trade agreements. This
experiment involved 112 participants, placed in a laboratory where they would be tested. The
subjects had to increase their profit by trade agreements and could do so by formal or informal
negotiation. This experiment put the social exchange theory to the test and studied the power,
creation of commitment, and equity between the subjects (Cook & Emerson, 1978).
The theory also shows it can be simple to understand which means it has parsimony, as it has few
components to grasp in order to fully comprehend the theory.
Some of the parts in which it seems to be week are reliability as everyone is different the tests
can bring upon different results depending on the relationship in which one seeks to have with
another human being. The scope is too broad as it has been used to identify trust in various
exchange relationships (Pillay & James R, 2015). The theory as stated before can be found used
in a variety of areas from psychology, to sociology, and even economics the scale is broad and
varies in each category.
Improvements to Theory
The theory of Social Exchange seems like a tricky one for improvements. As there has already
been numerous studies and research dissected off from the theory leading to other theories such
as LMX. It is hard to justify any improvements on this theory as it is a parsimony being able to
grasp easily the concepts and apply them to ones life. Although it is tough for us to understand
others this theory allows a true benefit to us in seeking out the exchange in order to build a
relationship. Many look at this theory towards themselves as how they can gain a reward, but
you could also see how the person on the receiving end will benefit in order to create a good
exchange and relationship. Social exchange theory is merely about building relationships and
determining the outcomes through comparison levels.
Conclusion
To conclude, the social exchange theory helps us to see our social behavior through the eyes of
an exchange process. The main goal is to maximize benefits and minimize costs, meaning you go
about weighing the potential benefits and risks of a social relationship. The main area in which
you will see a lot of social exchange is in the business world. This can come of great help to you
at your job as its used to show two-sided, mutually contingent and reward process which
involves transactions. But throughout the business world and our lives we must be careful to not
have too much deprivation as Homan points out in his main propositions of the theory. When you
frequently receive a reward of the same worth or similar value such as at work, the less valuable
the reward can become to you. What we can take away as a key value of knowledge is that from
the beginning of when we are born training starts, we learn and our behavior is modified. The
behavior and thought process which we gain become consistent with the goals of the ones doing
the socializing. We make decisions based off the reward and cost during the socializing, which
works for the culture or society we live in and bring about the development of this theory into the
world.

References:
1. LIOUKAS, C. S., & REUER, J. J. (2015). ISOLATING TRUST OUTCOMES FROM
EXCHANGE RELATIONSHIPS: SOCIAL EXCHANGE AND LEARNING BENEFITS
OF PRIOR TIES IN ALLIANCES. Academy Of Management Journal, 58(6), 1826-1847.
doi:10.5465/amj.2011.0934
2. Jovanovich, H. B. (1982). Equity and Justice in Social Behavior (2nd ed.). New York,
NY: Academic press.
3. Vol. 43). Washington, DC: American Sociological Association.
4. Pillay, S., & James, R. (2015). Examining Intercultural Competency through Social
Exchange Theory. International Journal of Teaching and Learning in Higher Education,
27(3), 320-329.
5. Graen, G. (1968). Leadership quarterly. Stamford, CT /: Elsevier Science.
Cook, K. S., & Emerson, R. M. (1978). American Sociological Review (5th ed., Vol.