Generalized Exchange

Everyday people help others without expecting benefits in return from them in the future. Social exchange theorists call this pattern a system of “generalized exchange.” Systems of generalized exchange have been a puzzle for social exchange theorists because such systems are only possible through a process of indirect reciprocity.

Social exchange theory classifies exchanges into two categories: restricted (direct) exchanges and generalized (indirect) exchanges. A restricted exchange involves only two actors. The first actor gives resources to the second actor, and then the second actor gives resources to the first actor. If A gives to B, then B gives to A. In contrast, a generalized exchange (indirect exchange) involves more than two actors. Moreover, there is no relationship between the person who receives a resource from someone else and then to whom that person eventually gives resources. If A gives to B, B does not give back (reciprocate) to A. Instead, C, a third party, may give to A. Thus, reciprocation is indirect. A eventually receives resources in this system, just not from B. Instead, A receives resources indirectly from B through C. “If I see burglars in my neighbor's house, I have the duty of doing something about it (e.g., calling the police), not because I expect any reciprocation—of whatever type from my unfortunate neighbor—but perhaps because I expect any neighbors of mine to do the same thing if they see burglars in my own house” (Ekeh 1974:206).

Social exchange theorists have distinguished three major forms of generalized exchange. The first form is referred to as chain-generalized (network-generalized) exchange (Ekeh 1974; Yamagishi and Cook 1993). Suppose there is a network structure of three actors: A, B, and C. In this exchange system, A gives resources to a designated recipient (B) in the network. B does not reciprocate directly. Instead, A may receive resources from another actor (C) in the network who occupies a position that permits C to give to A. The examples of chain-generalized exchange include the Kula ring described by Malinowski and matrilateral cross-cousin marriage described by Lévi-Strauss. The second form of generalized exchange is referred to as group-generalized exchange (Ekeh 1974; Yamagishi and Cook 1993). In this exchange system, group members pool their resources, and then all members receive benefits that are generated by pooling. One example of group-generalized exchange is maintaining a clean bathroom in a shared apartment. A second example of group-generalized exchange is the gathering of villagers to build a barn for each villager, one at a time. The third form of generalized exchange is referred to as pure-generalized exchange (Takahashi 2000). Pure-generalized exchange is network-generalized exchange without a fixed network structure. In this form of generalized exchange, each actor can give resources to any member of the group. The example of the witness of a burglary given above (by Ekeh 1974) is an instance of this form of generalized exchange. Since there is no fixed network structure, pure-generalized exchange is characterized by unilateral resource giving, which is sometimes considered to be altruism.

[Page 316]Originally, generalized exchange, especially network-generalized exchange, played a prominent role in social exchange theory in anthropology. Classic examples include the Kula ring and matrilateral cross-cousin marriage. These theorists argued that the function of generalized exchange is to enhance solidarity and morality among members of the exchange system and to contribute to the integration of society (Ekeh 1974).

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