Which theory perspective views families and relationships based on rewards and cost?

Social Exchange Theory is an important social psychology concept that concerns social changes as a process of interactive exchanges between different people. This theory is often used within the business world to explain and analyze commercial transactions.

What is the History of the Theory?

Social Exchange Theory has strong roots in the fields of economics, sociology and psychology. From a historical perspective, early psychologists focused on the principles of reinforcement, functionalism, and utilitarianism. In fact, the famous French anthropologist Claude Lévi-Strauss incorporated the important ethnographic principles of gift exchange and kinship systems into the theory of social exchange.

Interestingly enough, the theory of social exchange isn't a unified and standardized theory. Instead, there are different theories that contribute to the overall theoretical framework. However, all viewpoints agree on basic assumptions about humans. For example, people generally seek rewards, avoid punishments and are rational beings.

What is the Fundamental Concept of the Theory?

The theory of social exchange views human interactions and exchanges as a kind of results-driven social behavior. The fundamental concept of the theory of social exchange is cost and rewards. This means that cost and reward comparisons drive human decisions and behavior. Costs are the negative consequences of a decision, such as time, money and energy. Rewards are the positive results of social exchanges. Therefore, the generally accepted idea is that people will subtract the costs from the rewards in order to calculate the value.

For example, a person asks an acquaintance to help them move, but they only slightly know each other. The acquaintance will assess their relationship history, the state of their relationship and the potential benefits. If the acquaintance doesn't feel close to the person and doesn't plan on pursuing a social relationship, they may decline. However, if the person promises certain favors, such as helping out the acquaintance with a difficult problem, they may agree.

What are the Basic Principles of the Theory?

The theory of social exchange proposes that individuals will make decisions based on certain outcomes. For example, they will expect the most profit, rewards, positive outcomes and long-term benefits. They will also prefer the exchange that results in the most security, social approval and independence. In contrast, they will also choose alternatives that result in the fewest costs, consequences and least social disapproval. Therefore, every social exchange decision can be a complex decision that requires the person to evaluate different costs and rewards.

Cross-Culture Perspectives

Cross-cultural researchers note that when analyzing the decisions of different societies, cultural values should be included in the process. This is because every culture has their own unique way of judging value, costs and rewards. For example, Asian societies, such as China and Japan, are collective cultures that emphasize group harmony and sacrifice for the group. Therefore, certain individual costs, such as personal freedom or happiness, are not as important as in individualized cultures. In fact, the negative costs of social disapproval are more severe in collective Asian cultures.

Applied Social Exchange Concepts

The theory of social exchange is uniquely applied in different fields. For example, the theory of social exchange is central to the business concepts of relationship marketing. From this perspective, the client is an investment that must be properly managed and cultivated. On the other hand, psychologists often analyze relationships within the framework of social exchange. This is because a couple's relationship health depends on how the individuals involved measure the costs and rewards of their relationship.

To recap, the theory of social exchange is important to understand human interaction and decision making. The theory has excellent applications for real-world situations, such as understand business and interpersonal relationships. The Social Exchange Theory is something that everyone should understand and incorporate into how they make decisions.

Have you ever been doubtful of the relationship you're in? Have you thought about what you're getting out of it and compared that to what you were giving into it? Have you ever made a pro and cons list about your partner? If so, there are chances that you have been putting the social exchange theory into practice.

• First, we will talk about the social exchange theory in psychology. We will then explore the assumptions of the social exchange theory.
• Next, we will discuss a real-life application of the social exchange theory in relationships.
• Then, we will discuss an example of social exchange theory in a friendship.
• Further, we will talk about some other psychological explanations for relationships, which are extensions of the social exchange theory.
• Finally, we will evaluate the social exchange theory, talking about its strengths and weaknesses.

Fig. 1 - Social exchange theory explores the costs and benefits of relationships.

Social Exchange Theory: Psychology

Researchers in psychology have long been interested in how relationships develop between humans. Are relationships developed based on mutual gains, or are people more invested if the benefits of maintaining a relationship outweight the costs? Social exchange theory explores the costs versus the benefits of relationships and how people minimise and maximise them respectively.

The social exchange theory suggests that a relationship is a constant negotiation of profits (rewards) and losses (costs). People try to maximise benefits and minimise the costs in a relationship ( a cost-benefit analysis), according to social exchange theory.

Chores, sex, companionship, and compromise are all different types of social exchange. Using these types of social exchange, psychologists Thibaut and Kelley (1959)¹ explained relationships in economic terms.

According to them, partners will strive to maximise profits such as sex, companionship, and emotional support and minimise losses such as compromise, arguments, and commitments; these tend to change over time.

Comparison Level

There are two levels to the social exchange theory: the comparison level and the comparison level for alternatives.

The 'comparison level' measures the rewards a person thinks they are entitled to in a relationship.

Since every individual and every relationship is different, the comparison level varies. Overall, however, it can be affected by a variety of external and internal factors.

Seeing a romantic movie on television, experiencing how relationships function within your family and observing your friendship group are all external factors that can contribute to how you judge your own relationship.

On the other hand, how confident you are, your self-esteem and your self-worth are all internal factors that directly contribute to the comparison level you feel you deserve.

Comparison Level for Alternatives

In certain situations, the comparison level can lead to the comparison level for alternatives. You might be wondering what this means and how it's different.

The comparison level for alternatives is when an individual judge their relationship and identifies that they could be receiving more benefits and fewer costs from an alternative relationship with someone else.

According to Thibaut and Kelly’s theory, people will stay in their current relationship if they find it more profitable than the alternatives.

Let's say you are in a relationship where your partner works out of town. At first, this is fine, because whenever they come home, they bring you gifts, which is a reward. The comparison level in this case would be your judgement of the happiness you are receiving due to the rewards you are getting every time your partner returns.

Imagine that these rewards stop after a while, and it becomes tiresome when they are never around. The costs begin to outweigh the rewards, and you might want to break up with your partner, thinking that a relationship with someone who works in town might be more beneficial for you. This is the comparison level for alternatives.

Every individual wants their relationships and interactions in life to be valuable to them. What is valuable for one individual may not be valuable for another, so this theory does not aim to specify what is beneficial and what isn't. Even so, it relies on a few assumptions.

Fig. 2 - According to social exchange theory, comparisons are made according to a cost and benefit analysis.

Social Exchange Theory Assumptions

The social exchange theory might suggest that a relationship is a constant negotiation of profits and losses, but in order to do that, it makes certain core assumptions about human nature as well as the nature of relationships. The assumptions the social exchange theory makes about human nature are as follows:

1. Individuals will always look for what is most profitable to them instead of what is most costly.
2. Since is it impossible to know what rewards and costs an interaction actually offers before making that interaction, individuals tend to guide their behaviour by their own expectations of rewards and costs.
3. Individuals are rational and are able to weigh the rewards and costs of a relationship, as well as consider other alternatives before making their final decision.
4. Since each individual is different and matures through life experiences differently, the manner in which they weigh these costs and benefits will differ from person to person and will also change over time.

Further, it makes assumptions about the nature of relationships as well. These are -

1. Any social exchange relies on interdependence. This means that being able to receive benefits from another person is dependent on one's ability to provide others with them as well.
2. Social exchanges are controlled by standards of reciprocity and fairness.
3. Benefits received via a relationship contribute to an individual's trust, which further strengthens the relationship.

This theory can be applied to different parts of an individual's life - friendships, educational settings and romantic relationships. Let's take a look at some applications of this theory to understand it better.

Application of Social Exchange Theory

Let's talk about how the social exchange theory can apply to real-life relationships.

Social Exchange Theory in Relationships

We've already discussed what the social exchange theory means, but how does it apply to real-world relationships?

Couples’ therapy uses the social exchange theory, such as Integrated Behavioral Couples Therapy (IBCT), in which couples are encouraged to increase positive interactions with their partners (rewards) and decrease negative ones (costs).

Christensen et al. (2006)² found that two-thirds of couples treated with IBCT reported their relationships improved greatly as well as their happiness. This shows SET has positive real-world applications.

Fig. 3 - Couples in therapy are encouraged to work through their problems to maximise rewards.

Social Exchange Theory Examples

Since we've discussed an example of the social exchange theory in relationships already, let's try and apply this theory to another aspect of an individual's life.

Imagine you have a friend that you enjoy spending time with, but when it comes to supporting, they only ever seem to seek support from you, rather than reciprocate it.

If you feel that you don't need the support and are happy with how things are going, you may choose to continue the friendship. On the other hand, if you decide that the lack of support from your friend is outweighing the benefits you receive when you spend time with them, you are likely to end the friendship.

Evaluation of the Social Exchange Theory

While the social exchange theory does have its strengths, it has its fair share of weaknesses as well. Let's discuss some of these below.

Strengths

Sprecher (2001)³ found that the comparison level of alternatives was a significant factor in ensuring commitment in relationships. For women especially, he found that rewards were a predictor of satisfaction. This finding shows social exchange theory at work, as people consider rewards and costs and comparison in real relationships.

Brosnan and De Waal’s (2003)4 research suggests an evolutionary need for benefits in a relationship. In their study of capuchin monkeys, they observed monkeys became angry when given unequal reward distributions for playing a game, suggesting an innate need for rewarding relationships.

Do you think an animal study can directly apply to humans?

Weaknesses

Most studies into social exchange theory are game-based research tasks involving strangers, e.g., Emerson and Cook’s (1978)5 study in which partners bargained to get the highest score in a video game. The lab setting, unrealistic tasks, and unknown participants do not mirror real-life relationships, thereby lacking reliability and validity.

The social exchange theory assumes couples keep a tally of positives and negatives throughout their relationship. Clark and Mills (2011)6 argue this is not the case for romantic relationships; these are communal, not exchange relationships, such as your relationship with a colleague or boss. Further, equity theory states that perceived rewards do not keep a relationship afloat, but rather the perceived equity.

Moreover, the social exchange theory attempts to set a universal approach to relationships, but as mentioned above, relationships vary from couple to couple, so the approach cannot be generalised.

Which theory is based on rewards and cost?

What theory describes relationships in terms of rewards costs profits and losses?

How does the social exchange theory view family?

Which theory states that the key to maintaining a relationship is maintaining a satisfactory cost reward ratio?