Social Exchange Theory in Relationships: Definition, Examples & Predictions

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  • 0:05 Social Exchange Theory…
  • 1:45 Cost-Benefit Analysis
  • 3:05 Comparison Level
  • 5:28 Lesson Summary
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Lesson Transcript
Erin Long-Crowell

Erin has an M.Ed in adult education and a BS in psychology and a BS in management systems.

Expert Contributor
Jennifer Levitas

Jennifer has a Ph.D. in Psychology. She's taught multiple college-level psychology courses and been published in several academic journals.

In this lesson, we define and discuss social exchange theory and what it predicts about romantic relationships. We also define and discuss the theory's three components: cost-benefit analysis, comparison level, and comparison level of alternatives.

Social Exchange Theory Definition

Can you think of someone that used to be your friend but whom you never see anymore? How many people would you say have left your life, even if they were at some point very important to you? It's a fact of life that not all friendships or romances last forever. But why? Why do we stay connected with some people but not to others?

In another lesson, we discussed the fact that an equal exchange of benefits is desirable and perceived inequality puts a relationship in jeopardy. However, there is another theory used to explain why we choose to start and continue only certain relationships. Social exchange theory proposes that the relationships we choose to create and maintain are the ones that maximize our rewards and minimize our costs. According to this, we are more self-centered and not necessarily concerned with equality. The basic idea is that relationships that give us the most benefits for the least amount of effort are the ones we value the most and are likely to keep long-term.

It is important to note that social exchange theory is a bit more complex than a simple economic model of costs and rewards. It actually suggests that we feel positively or negatively about our relationships because of a combination of three factors:

  1. Cost-benefit analysis
  2. Comparison level
  3. Comparison level of alternatives

Let's go over the definition of each one of these components.

Cost-Benefit Analysis

First, a cost-benefit analysis is a process for calculating the value of a relationship in terms of potential rewards and costs. The potential costs of a relationship are those things that we see as negative: being needy, annoying habits, and so on. The rewards or benefits of a relationship are those things that we see as positive: desirable personality traits, physical attractiveness, how we feel when we are around him or her, and so on. This cost-benefit analysis is the economic model that can predict or keep track of our net rewards and the overall value of the relationship.

For example, imagine that Bridgette Bachelorette is trying to decide between three potential suitors. Bridgette conducts a cost-benefit analysis and determines the initial value of each potential relationship by subtracting the perceived costs from the perceived benefits. She chooses the suitor with the best results, which happens to be Brad Bachelor. She may dislike his lack of money and quick temper but feels that the benefits (he is handsome, caring, and fun to be around) outweigh the costs.

Comparison Level

According to social exchange theory, we use a cost-benefit analysis at the beginning of a relationship to help us decide if we want to start it. However, we also continue to use cost-benefit analysis as the relationship develops to decide if we want to continue it. The same is true of the other two components of social exchange theory mentioned earlier: comparison level and comparison level of alternatives. Comparison level refers to the expectations for the relationship based on past experience. Basically, we compare the costs and benefits of the current relationship to the costs and benefits of our past relationships. Some people have a high comparison level and expect a high number of rewards.

For example, Bridgette Bachelorette is used to having rewarding relationships with boyfriends who pay a lot of attention to her and treat her well. She will expect her relationship with Brad to be similar. If it is not, we would predict that she may rethink her decision of dating him. However, another woman may have a much lower comparison level. We could predict that this second woman would be much happier in the same relationship with Brad because her expectations are not as high.

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Additional Activities

Social Exchange Theory Activities

Writing Prompt 1:

One of the premises of social exchange theory is that people are generally self-interested, and that they want to get more out of a relationship than they put into it. Think of a relationship in your life that you have had for at least a year, such as with a spouse, a significant other, or a best friend. Do you feel like you are getting more out of the relationship than you are putting in as would be predicted by social exchange theory? There is no wrong answer to this question. For example, you may feel that you are putting in more effort than the other person, that the reward/benefit ratio is equal, or that you are benefiting more than the other person. In two to three paragraphs, describe how you perceive the ratio of the relationship in terms of rewards and costs.

Writing Prompt 2:

Social exchange theory posits that people compare potential alternative relationships to the current relationship. When there is a perception that the alternatives are better than the current relationship, a person will be inclined to switch relationships. Do you think that this is more likely to be the case today rather than in generations past due to the ubiquitous use of dating apps? Write a one to two paragraph essay describing why social exchange theory would predict shorter-term relationships due to technology. For example, swiping through many attractive alternatives may make a person feel like he or she could do better with someone else.

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