Social Exchange Theory (SET)

Social Exchange Theory, commonly known as "SET" is an old theory of reciprocity, which sets out to explain how exchange happens between people (Thibault & Kelly, 1959). In society, we are motivated by a reward that we value to give something up in exchange for that reward. For example, we might give up our time by watching someone's children, our creativity by working out a strategy through something, our energy by cutting someone else's grass in exchange for meals, a roof over our heads, or a ticket to a performance. We swap something we have for something we value (Ahmad et al., 2023; Redmond, 2015). 

It should be noted that our very human nature leads us to "seek profits in our exchanges" in an attempt to ensure that our "rewards are greater than the costs"...to us. And if we see that the swap lacks equity, or if "others are rewarded more for the same costs we incurred" we tend to be irritated (Redmond, 2015).

SET can be defined as: an explanation of social change and stability as a process of negotiated exchanges between parties, where we balance the positives or benefits against the negatives or costs of taking a particular action or choice (Meh, 2017). Trying to analyse this is complicated, but we tend to be instinctively pretty good at coming to a conclusive evaluation. However, we also need to remember that not all costs and benefits cannot be reduced to a perfect number or ratio. 

A key principle of SET is that we form reciprocal relationships with others – a social or psychological contract – using a long series of cost-benefit analyses over time. And if someone feels the costs or negatives outweigh the positives of their relationship, the affected person is likely to leave the relationship. 

• Strengths: SET is simple; we can follow it and relate to it easily. It helps us to detect a good, worthy exchange relationship quickly, and explains conflict and many family issues. It can help people to look for and find better relationships. It reminds us that if we do not provide value in exchange of our costs, then the other person is likely leave the relationship as they are not getting as much out of it as they are putting in (Mch, 2017). 
• Weaknesses. But, SET implies that we are selfish. Use of it can lead us to overly-generalise our relationships: if we keep reducing relationships to a cost-benefit analysis it may dehumanise those around us. It also may leave us blind to social change in unstable times (Mch, 2017). 

SET was formalised by four key industrial psychologists from the late 1950s through to the early 1960s: sociologists George Homans (1961) and Peter Blau (1964); together with the work of social psychologists John Thibaut and Harold Kelley (1959). 

I like it.

Sam

References:

Ahmad, R., Nawaz, M. R., Ishaq, M. I., Khan, M. M., & Ashraf, H. A. (2023). Social Exchange Theory: Systematic review and future directions. Frontiers in Psychology, 13, 1015921, 1-13. https://doi.org/10.3389/fpsyg.2022.1015921

Mch, A. (2017, May 22). Social Exchange Theory. https://prezi.com/n-gc3svxutu7/social-exchange-theory/

Redmond, M. V. (2015). Social exchange theory [White Paper]. Iowa State University. https://dr.lib.iastate.edu/entities/publication/3269a123-c890-4b0c-b114-fd12e43e7f41

Thibaut, J. W., & Kelley, H. H. (1959). The Social Psychology of Groups. Routledge.