Exchange Processes

Exchange Theory

When Homans first proposed that social interactions might be viewed from an exchange perspective, his thinking was influenced by research in economics. He proposed that social interactions are based on an exchange of goods. These goods might be material, for example money, gifts, or material possessions, or more symbolic (e.g., prestige, approval). The motivation for our interactions with others is that those interactions provide us with desired goods (rewards). Others interact with us because we also possess the ability to provide those individuals with rewards. Thus, our social interactions are based on an exchange of rewards with others.

Homans also noted that rewards are also accompanied by costs. Some costs are encountered when we provide others with desirable resources. For example, it is costly to provide others with monetary rewards and takes time to provide another with information.

Another type of cost (opportunity costs) is incurred when individuals are faced with multiple situations that provide opportunities for obtaining rewards. For example, individuals involved in [Page 552]romantic relationships receive rewards by spending time with their partners. The opportunity cost of doing so, however, is that spending time with their partners prevents them from engaging in rewarding activities with other individuals such as friends or family members.

In applying economic theory to social interactions, Homans proposed that individuals seek to maximize their profit from social interactions, such that Profit = Rewards − Costs. It has also been noted that when individuals encounter high costs, they typically expect high rewards in return.

Although the notion of individuals exchanging rewards is, on the surface, a simple one, several points deserve mention. First, rewards are subjective. A good is rewarding only if another individual values it. Many individuals find attention from others to be rewarding but an individual suffering from social anxiety may find that attention aver-sive. Second, scarce resources tend to be valued more highly than do those that are plentiful. Third, satiation can occur if a reward is received too often. That is, if an individual receives the same reward repeatedly, that reward tends to lose some or all of its value.

To this point, rewards have been discussed in a rather general context. Research by Uriel and Edna Foa, however, suggests that most rewards exchanged in social interactions can be divided into six categories: love, status, information, money, goods, and services. Further, these categories differ along two dimensions. First, some rewards are more concrete whereas others are relatively abstract. Goods and services are generally the most concrete, but love and money are considered to be more abstract. Status and information are the most abstract.

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