Social Exchange Theory

Within the area of social psychology, Social Exchange Theory was developed to explain communication and interaction, as well as the factors governing interaction in humans. This theory has had tremendous impact on social psychology, sociology, and many other fields, including areas that initially influenced the development of the theory.

What is Social Exchange Theory?

Social Exchange Theory discusses an individual’s outcome to different social interactions by examining the exchange of resources during social interactions. These resources can be material goods and services or an exchange of social value. This theory is highly reliant on reciprocity for whatever costs are incurred by the individual.

The outcome can be calculated by subtracting the costs from the benefits. This analysis is subjective because different individuals place different values on resources, even those resources defined by a measurable system, such as currency. It should be noted that this expectation plays a large role in an individual’s analysis of the value of the outcome. This affects the individual’s social relationships because an individual anticipating a particularly high outcome will be disappointed and ultimately unsatisfied with the relationship if a smaller outcome is reached. However, an individual with a lower expectation for the outcome will not encounter this difficulty. Therefore, satisfaction can be calculated by subtracting a “comparison level” from the outcome. If the comparison level is higher than the outcome, the value for satisfaction will be negative.

For example, Steve buys Mary a pricey Christmas present which required hours of thought and scouring the mall. Come Christmas Day, Mary gives Steve a keychain she purchased from a dollar store. In this simple example of exchanges, Steve made a large investment of time and money, but the benefits received are subjectively small. For Steve, the outcome will be very small or in the negative range. His expectations were also very high, so subtracting his comparison level from the outcome results is a low level of satisfaction.

Steve is unlikely to simply sever his relationship with Mary over this particular outcome. There is also the factor of dependence to consider. Dependence is calculated by subtracting the comparison level of alternatives from the outcome. There are other individuals in the world, and Steve could form interactions and relationships with these individuals. However, these alternatives must have a higher comparison level than the outcome of interactions with Mary.

One common example of dependence occurs in exchanges for goods and services. Steve might frequent a family-owned grocery store in his small hometown. The prices are annoyingly high and the selection of products is poor, so Steve is unsatisfied with the outcome of his grocery shopping experience. However, this might be the only grocery store for miles. The only possible alternative is a gas station convenience store with an even smaller selection, so this is not a viable alternative. Steve continues to interact with the grocery store and its owners because the alternatives are not better than the outcome of his current interaction.

Overall, the Social Exchange Theory asserts that humans seek to maximize rewards with minimal costs. This is achieved through analyzing the outcome of social interactions.


The first major publication regarding Social Exchange Theory, which was entitled “The Social Psychology of Groups,” was published by John Thibault and Harold Kelley in 1952. The theory was later refined in the laboratory by two sociologists at University of Washington named Richard Emerson and Karen Cook. This work started in 1978 and continued throughout the 1980s.


Social Exchange Theory possesses the necessary qualities of a scientific theory. Predictions can be generated from applications of the theory, and new hypotheses have been created from the central ideas of the theory. Social Exchange Theory is a parsimonious effort to explain social interactions and communications. Like all scientific theories, it can be proven false.

However, Katherine Miller poses many objections to Social Exchange Theory in her 2005 publication. According to Miller, Social Exchange Theory assumes that the intimacy achieved in relationships is linear in nature, despite many relationships skipping traditional steps or regressing. Also, the theory relies on complete openness in all interactions, even though some exchanges may require less openness. The theory’s background in economic theory assumes that human exchanges are all rational processes. Lastly, Miller argued that this theory’s focus on individual outcomes does not consider cultures with group-oriented interactions.


Despite any criticism, Social Exchange Theory remains relevant within social psychology schools and continues to spawn research. With a firm background in fields such as anthropology, economics, and psychology, this theory is likely to remain an area of interest in many fields for years to come.

1 Comment

  1. The Social Exchange theory basically shows our need to either have our needs met or give in compliance to someone else. In this video you can see how on edge Sheldon is in order to get the right gift that will be equivalent to the gift he received. However, it can go the opposite way, if we feel we put more effort in a relationship than the other person than we are inclined to give up on the relationship. for example in this video,

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