Social Exchange Theory

Social Exchange Theory (SET), a theory based around basic economic principles, evaluation of relationships; consisting of four measures and has been argued whether or not it’s even a theory at all. Richard M. Emerson, a former theorist suggests that SET is “a frame of references within which many theories –some micro and some macro–can speak to one another, whether in argument or mutual support” (Emerson, 1976, p. 336). SET is based on how humans evaluate relationships by making rational calculations based on costs and rewards, designed to maximize individual profit. What makes the theory difficult to diagnose is defining reward. The theory consists of two economic formulas. The first formula: Rewards – Cost = Net Profit translates to: anything beneficial (rewards) minus costs, which could include finances, parenting skills, family matters or stress equals a net profit. The net profit determines whether or not a relationship is beneficial to the individual. The second formula is: Outcome = Rewards – Cost. This means that a relationship will result in a positive outcome if rewards outweigh costs. A negative outcome is the result of costs outweighing rewards. As we move further into Social Exchange Theory and view critiques and criticisms we’ll examine the economic principles in more detail. First, what must be made clear are the measures of evaluating Social Exchange Theory.

Before discussing the theory further there must be an understanding in how theories are evaluated. SET looks at four crucial components of the evaluation process: scope, utility, testability and heurism. First and foremost in evaluating theories is scope. How much does the theory describe and explain what it’s meant to. SET is a broad based theory as its sc...

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...of humans rationalizing rewards, costs and net profit in a relationship. Relationships vary from friendships to romantic partnerships and even corporate relations. There are no definite answers the measures of SET, as its broadness contains lots of room for heurism. Critics and critiques of SET can be argued and elaborated. However scholars and theories can agree or disagree that, like Emerson, Social Exchange is not a theory at all, but frameworks consisting of micro and macro theories.

Works Cited

Andersen, M. (2000). Sociology: The Essentials (6 ed.). WADSWORTH.

Emerson, R. M. (1976). Annual Review of Sociology (Vol. II). Annual Reviews.

Feist, G. J. (2012). Psychology: Making Connections. McGraw-Hill Ryerson.

Jannik Holthausen. (n.d.). Scientific review of the Social Exchange Theory.

Wood, J. T. (2003). Communication Theories in Action (III ed.). WADSWORTH.