Reciprocity Theory


Reciprocity occurs when individuals or groups fairly exchange with one another. It exists in different forms and settings. There is positive reciprocity (i.e., rewarding kind actions) and negative reciprocity (i.e., punishing unkind actions). Reciprocity can present itself either directly or indirectly. Individuals and businesses engage in reciprocal relationships to give, receive, and cooperate. Examples from businesses such as Downtown Liquors portray how reciprocity can improve relationships between the firm and its customers. It is important to be familiar with reciprocity theory because it can help to understand the formation and maintenance of relationships and explain principles of social exchange, ethics, decision-making, and cooperation.

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