Social Exchange Theory

Social exchange theory generally conceptualizes interaction as a series of social exchanges that explain the development, maintenance, and deterioration of interpersonal relationships. The underlying explanatory mechanism is the value that participants place on the symbolic and material behaviors that constitute the relationship relative to other relationships. Exchange behaviors, including one’s own relational investments and outcomes, are evaluated subjectively in terms of rewards and costs. Relationship management decisions are made based on the assessment of costs relative to benefits. This entry first describes the principles of social exchange theories and then describes how these are reflected in current approaches to corporate reputation.