Social Exchange Theory

Theory of Social Exchange: Critique In daily exchanges, people always try to experience positive prospects among people who interact with them. Social Exchange Theory (SET) is based on the idea that people think about their relationship from an economic point of view (West 186). People will consider the cost of this relationship and they will compare them with the revenue they got from the same relationship. Cost includes the negative factors of the relationship, such as investment efforts on relationships.

Social exchange theory is a social psychology and sociological point of view that interprets social change and stability as a process of negotiation and exchange between parties. Social exchange theory believes that interpersonal relationships are formed through subjective cost benefit analysis and comparison of alternatives. The theory comes from economics, psychology and sociology. Social exchange theory has many major assumptions in rational choice theory and structuralism. It is often used in business circles to imply accidental and informative processes between bilateral countries, including transactions and simple interactions.

Social exchange theory considers exchange as social behavior that can lead to economic and social consequences. Social exchange theory is usually analyzed by comparing the interactions among people. Research on the theory from the point of view of microeconomics is by Blau. In his opinion, everyone is trying to maximize his victory. Browre stated that it is possible to observe social interaction anywhere, not only in market relationships but also in other social relations such as friendship, if this concept is understood. When people get fair profits from their costs, the social exchange process will bring satisfaction. The main difference between social exchange and economic exchange lies in the nature of the exchange between the parties. Neoclassical economic theory thinks that actors deal with markets and environmental parameters (such as market prices) rather than dealing with other actors.

Social exchange theory thinks social behavior is the result of the exchange process. The purpose of this exchange is to maximize profits and minimize costs. According to the theory developed by sociologist George Homans, people measure the potential benefits and risks of social relations. If the risk is greater than the reward, people end or abandon the relationship. The benefit is that you get from relationships such as fun, friendship, friendship and social support. Your friend may be insatiable, but he brings much fun and excitement to your life. When you decide the value of friendship, you may think that the income exceeds the potential cost