Exchange Networks

Five Characteristics of Exchange Networks

According to the different theories, exchange networks have the following characteristics: (1) they consist of sets of actors, either individual people or collective units; (2) valued resources are distributed among these actors; (3) each actor might have different options of exchange with others in the network; (4) there is some degree of commitment among actors in using their exchange opportunities; and (5) actors are connected into a single network. These and other principles form a theoretical framework for the empirical studies of exchange networks.

Though economic theorists began to study exchange almost a century ago, the development of social exchange theory in sociology and social psychology was initiated by the works of theorists working on the concept of social structure in the 1960s and 1970s. Some of them interpreted social structure as a configuration of exchange relations between actors possessing certain positions and statuses. Two theorists should be noted with regard to the development of exchange theory: Peter M. Blau and George C. Homans, who are considered to be the founders of this perspective in social sciences. Their attempts to explore interaction between individuals were based on concepts of economic theory, including rational choice and utility from one side, and concepts of behaviorist psychology regarding reward and punishment from the other side. Exchange was analyzed through the perspective of expected outcomes resulting from interaction between two actors—a dyad. These outcomes could be evaluated in terms of transferring valued items to each other (including material, symbolic, informational, or other kind of resource). Although these exchanges occur on the micro level, exchange relations form macro structures and are the basis for social dynamics.

Homans developed a theory based on the behavioral principles. According to this approach, social structure depends on elementary forms of social behavior and transforms if this behavior changes. One of the assumptions is that the behavior of a crowd can transform social order and institutional structures. Nevertheless, the main focus of the theory developed by Homans was on the micro level of social life. Instead, Blau's work includes concepts of micro and, to some extent, macro levels: group formation, ties, social integration and hierarchy, and conflict during exchange processes. Social associations are generated due to the continuous relations of exchange, creating different social structures and substructures. But under the conditions of mutual expectations toward possible benefits, actors make choices of partners for exchange in different directed sets of connections, thus causing a ranked (or status) hierarchy and situations of conflicts. Most of these conflicts are eliminated during the continuous process of exchange when the balance of power and resources distribution in the network change as well. Besides, shared values play an important role in balancing the interactions in large communities, enabling indirect exchanges.

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