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Theories of Family Relations

Exchange Theory

David Comp

Family theories are general principles that allow us to understand why and how

individuals and their families operate the way they do. These theories attempt to explain family

phenomena. Social exchange theory is no exception to this. Social exchange theory can be used

to explain why couples marry and divorce, have children, make major purchase decisions (house

and vehicles), or relocate the family to a new city. According to exchange theory, we as

individuals are motivated out of self-interest and that we make decisions based on maximizing our

rewards or profits and minimizing our costs. This is the main premise of social exchange theory.

This paper will examine many of the main assumptions, concepts and propositions associated with

social exchange theory. This paper will also provide examples of how the theory can be applied to

child and family phenomena. Finally, this paper will provide a brief critique of the theory and

offer other insights.

There are several key scholars who have made valuable contributions towards the

development of social exchange theory. John Thibaut and Harold Kelley’s 1959 work on The

“Social Psychology of Groups” was the major conceptual premise of social exchange theory.

Their focus was on the role of perceived rewards and costs in encouraging and constraining

behavior. George Homans’ work in 1961 titled “Social Behavior in its Elemental Form” describes

social relationships that involve a process of giving and getting rewards to and from others in a

way that is mutually gratifying. Ivan Nye’s contributions to social exchange theory have been

enormous. Nye has been the biggest proponent of exchange theory and in his 1979 work “Choice,
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Exchange, and the Family” introduced the concepts of norm of reciprocity and group level

exchanges. Ronald Sabatelli and Constance Shehan’s 1993 work titled “Exchange and Resource

Theories” provides a very comprehensive historical overview of exchange theories development.

Assumptions

There are several key assumptions associated with social exchange theory which deserve

some attention. One key assumption of social exchange theory is that humans are rational beings.

Nye (1982) states that “within the limitations of the information that they [humans] possess and

their ability to predict the future, they make the choices that will bring the most profit” (p.23). In

other words, humans make rational/sensible decisions based on the amount of information

available to them at that moment in time and that these decisions are made in order to receive the

greatest rewards with the least amount of costs. Sabatelli and Shehan (1993) contribute to the

assumption that humans are rational beings by stating that “…within the limitations of the

information that they [humans] possess, they calculate rewards, costs, and consider alternatives

before acting” (p. 396). For example, a single mother may be presented with the opportunity for a

promotion at work. She must make a rational decision, using the information available to her at

that time, of whether or not to accept the new position. She will take into consideration the

rewards (increased salary, new title, prestige) and the costs (additional child care costs, more time

away from her children, increased work load and responsibilities) when making her decision. If

she accepts the new position, she’s anticipating that the rewards will outweigh the costs. It must

be noted that the individual may make choices using inadequate information which would increase

the costs associated with that decision.

A second assumption of social exchange theory is that individuals must experience costs

in order to obtain future rewards. Nye (1979) explains this assumption as “all behavior is costly in

that it requires expenditure of energy and preempts time that might otherwise produce other

rewards” (p. 7). For example, a student decides to begin studies towards a Masters degree. The
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student will experience numerous costs during their studies such as: time and energy studying and

attending class, additional expenses, and/or more time away from their family. However, in the

long run, the ultimate reward of obtaining their Masters Degree will outweigh all of the costs. The

student chooses to adapt to and cope with all of the costs associated with obtaining the advanced

degree in order to achieve it.

A third assumption of social exchange theory is what Sabatelli and Shehan (1993)

describe as “the standards that humans use to evaluate rewards and costs differ from person to

person and can vary over the course of time” (p. 396). Nye (1982) holds a similar assumption that

“individuals vary in the value they place on the specific objects, experiences, relationships, and

positions” (p. 23). This contrast in the evaluation of rewards and costs may be attributed to

cultural, religious, or economic differences between individuals. The rewards associated with

obtaining a family pet may be perceived differently by different family members. One member

may view having a family dog as a reward for home security reasons while other members of the

family may receive the reward of companionship from the pet.

Social exchanges are regulated by the norm of reciprocity is another assumption that

warrants some attention. Bagarozzi (1993) indicates that this assumption, “in the form of

behavioral reciprocity, was adopted by behaviorists who hypothesized that satisfying marriages

were those where high rates of positive reinforcers and low rates of punishments were reciprocally

exchanged between spouses” (p. 412). The above stated example is a very good description of the

norm of reciprocity. The more an individual receives/experiences rewards the more they will

reciprocate similar rewarding actions or rewards that are meaningful to the other person.

Perhaps the most comprehensive assumption of exchange theory is that individuals are

motivated by self-interest. Klein and White (1996) indicate that “individuals are unilaterally

motivated by self interest-individuals seek things and relationships they regard as beneficial for

themselves” (p. 63). A similar description of this assumption is described in a study conducted by
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Schaffer and Lia-Hoagberg on prenatal care among low-income women. Schaffer and Lia-

Hoagberg (1994) note that “humans avoid relationships, interactions, and feeling states that are

dissatisfying or costly and seek out situations and experiences that are gratifying, pleasurable, or

rewarding” (p. 153). According to this assumption, in their study, pregnant women will make

choices whether or not to obtain prenatal care based on their perceptions of the rewards and costs

they and their family will receive from the care.

Concepts

As with the assumptions of social exchange theory, there are several key concepts that

should be discussed. Two of the key concepts associated with exchange theory are rewards and

costs. Although these two concepts differ in their meaning they are best explained together. Klein

and White (1996) define rewards and costs as:

a reward is anything that is perceived as beneficial to an actor’s

interests…although costs may be negative rewards-things perceived as not

beneficial to an actor’s self-interest-we should be careful to also include as

implicit costs cases in which rewards are missed or forgone. (p. 65)

Nye (1982) adds to the descriptions of these two concepts and states that “in general, we can learn

what is rewarding to people in society both by observing their behavior and by asking them what

they like or do not like” (p. 14). We are also able to determine what is costly to an individual by

following the same process of observing behaviors and questioning the individual about their likes

and dislikes.

A second key concept of social exchange theory is profit or maximizing utility. This

concept is part of the assumption that actors are motivated out of self interest. Profit, as described

by Nye (1982), “can be determined in terms of rewards and punishments involved in a

contemplated sequence of actions” (p. 15). Klein and White (1996) define profit in terms of a

ratio of rewards to costs and that “actors rationally calculate this ratio for all possible choices in a
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situation and then choose the action they calculate will bring the greatest rewards or the least

costs” (p. 66). Individuals will make decisions for themselves or their families based on the

predicted amount of profit they will receive from the choice.

A final key concept is that of Comparison Level (CL) and Comparison Level for

Alternatives (CL+). Again, these are two different concepts but they are easier understood if they

are explained together. These concepts were developed by Thibaut and Kelley. Thibaut and

Kelley (1959) defined Comparison Level as “a standard by which the person evaluates the rewards

and costs of a given relationship in terms of what he feels he deserves” (p. 21). Klein and White

(1996) further explain this concept as “the comparison (CL) of what others in your position have

and how well you are doing relative to them” (p. 66). For example, a wife may compare the

benefits of her marriage to other women who live in a similar marital environments. The concept

of Comparison Level is slightly different from the concept of Comparison Level for Alternatives.

Comparison Level for Alternatives is explained by Klein and White (1996) as “how well

you are doing relative to others outside of your position but in positions that supply an alternative

choice” (p. 66). The wife may not only compare her benefits relative to women in other

marriages, but she may also make an alternative comparison of the rewards of her current marriage

to the possible rewards of being divorced or remarrying. The Comparison Level of Alternatives is

very subjective. Sabatelli and Shehan (1993) note that “regardless of whether a better alternative

actually exists, the person who believes that one does is more likely to leave a relationship than a

person who believes that no better relationship exists” (p. 400). If the wife perceives that she will

receive more benefits or rewards if she divorces her husband she is more likely to leave her current

marriage.

Propositions

There are several propositions associated with social exchange theory and I will focus on a

few of the main ideas. One proposition of social exchange theory is that individuals engage in
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behaviors or choose alternatives that maximize their profit. This is perhaps the most powerful and

simplest proposition of exchange theory (Klein and White, 1996, p. 71). This proposition is

related to the assumption that humans are motivated out of self interest and the concepts of

rewards and costs. Nye (1982) further explains this broad proposition as “humans avoid costly

and seek rewarding statuses, relationships, and interaction and feeling states to the end that their

profits are maximized…or minimize their losses, since at times no alternative viewed as desirable

in a positive sense is open to the individual, group or organization” (p. 20). People marry because

the rewards of marriage outweigh the costs of being single. Another example is that I may

volunteer for the Special Olympics because I enjoy the spirit of competition, feel happy that I am

bringing joy to others, or enjoy teaching others about sportsmanship. I perceive all of these feeling

states as rewards.

A second proposition of exchange theory is explained in the work of Yogev and Brett on

the perceptions of the division of housework and child care and marital satisfaction. Yogev and

Brett (1985) state that “social exchange theory proposes that partners in a marriage will try to

maximize their rewards. Each should consider the relationship most satisfying when rewards

outweigh costs” (p. 610). In other words, the more the housework and child caring responsibilities

are equally shared between the partners the more stable the relationship will be. This is a form of

reciprocity in that one partner does not experience more costs than the other. The costs are shared,

thus increasing the rewards for one partner.

Klein and White (1996) suggest that “the analysis of long-term rewards and costs is

essential to understanding the behavior of its members” (p. 72). Nye (1982) advanced two

propositions from this statement. One proposition is that “immediate outcomes being equal, they

[humans] choose those alternatives that promise better long-term outcomes” (Nye, 1982, p. 20).

The second proposition related to the analysis of long-term rewards is what Nye (1982) describes

as “long-term outcomes being perceived as equal, they [humans] choose alternatives providing
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better immediate outcomes” (p. 20). Humans sacrifice many immediate rewards in order to

achieve long-term rewards. An example of this is the student working on their Masters degree.

The student has the long-term goal of obtaining their Masters degree and perceives that this degree

will increase their future rewards. The student will then experience more immediate costs while

they are completing their studies.

Application

Social exchange theory has numerous applications to working with families. It was noted

during a brief literature review that social exchange theory has been applied to the distribution of

housework and child caring responsibilities, divorce, family violence, relationship satisfaction,

decisions regarding prenatal care, and planning for marriage (Bagarozzi, 1993; Berardo, Shehan &

Leslie, 1987; Klein & White, 1996; Schaffer & Lia-Hoagberg, 1994, Yogev & Brett, 1985). The

following review on the some of the above mentioned applications of social exchange theory and

the family.

As mentioned before, social exchange theory may be applied to working with women

deciding whether or not to obtain prenatal care. Schaffer and Lia-Hoagberg (1994) interviewed

forty low-income pregnant women regarding their personal, family, and provider rewards and

costs they experienced in obtaining prenatal care. Schaffer and Lia-Hoagberg (1994) state that

“pregnant women make decisions about obtaining prenatal care on the basis of their perceptions of

rewards and costs for themselves and their families” (p. 153). The pregnant women in study

identified important rewards of prenatal care as the health of their babies, their own health,

partner’s desire for a healthy baby, monitoring of the pregnancy by qualified health care providers,

and the evaluation of problems by health care providers (p. 152). Schaffer and Lia-Hoagberg

make the recommendation that health care practitioners who provide care for low-income mothers

focus their efforts on interventions that are likely to make prenatal care the most rewarding

experience for women (p. 158).

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Social exchange theory is also helpful to those who are working with married couples

thinking of divorce. Understanding the concepts of Comparison Level (CL) and Comparison

Level for Alternatives (CL+) is key to working with these couples. Each spouse analyzes the

marriage by using the two comparison levels (Klein & White, 1996, p. 77). At the Comparison

Level, a spouse compares their rewards and costs relative to other marriages. If the spouse feels

that they receive less rewards in their marriage compared to others they may then choose the

option of divorce. In the Comparison Level for Alternatives, the spouse estimates the rewards

they would obtain if they were in a situation other than marriage. If the spouse determines that the

costs of divorce would outweigh the rewards, then they will not choose to leave their partner.

Levinger (1982) summarizes this phenomena and states that “individuals implicitly weigh the

social, economic, and personal benefits (or costs) of marriage…They choose to divorce only when

the future expected net benefits of a marriage compare unfavorably to its perceived alternatives”

(p. 112). The therapist can help the couple identify the costs associated with divorce as well as

focus on the rewards the couple currently has and can achieve in the future by working on their

marriage. This theory also has implications in therapy other than for working with couples

thinking of divorcing. The theory may also be applied to premarital education classes using the

Comparison Level and Comparison Level for Alternatives concepts.

A final application of social exchange theory is in the area of intervention and prevention

in marital and parent-child interactions (Klein & White, 1996, p. 80). This application is based on

the assumption that husband-wife and parent-child relations represent behavioral exchanges. A

therapist may help a couple or parents and their children develop a behavioral contract.

Bagarozzi (1993) states that “in designing behavioral contracts, the therapist must be sure that

positive exchanges are increased and that punishing exchanges are decreased because increasing

positive exchanges will not result in a reduction in negative reciprocal exchanges” (p. 413).

Developing behavioral contracts and teaching the couple and/or their children appropriate
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interaction skills in order to decrease the negative reciprocal interactions will produce more

rewards for all involved in the relationship.

Critique

Social exchange theory is extremely beneficial in its application to research and

understanding individual and family behaviors. It is also one of the more popular theories applied

to the family. Exchange theorists believe that all situations and relationships can be considered in

terms of rewards and costs. In everything that we as humans do we do out of self interest.

However, there are some criticisms of exchange theory which will be discussed in this

section. One criticism of social exchange theory is in regards to parents having children.

According to exchange theory, the parents choose to have a child because it will bring them more

rewards (satisfaction of providing care, adding additional members to the family, socially

acceptable thing to do) than not having a child. However, as Klein and White (1996) state “most

economists and parents will attest, children are expensive” (p. 83). The expenses associated with

raising a child may actually reduce the amount of rewards and increase the amount of costs the

parents experience. Having children may not be the most rational choice for the family.

Social exchange theory has also been criticized as involving tautological reasoning. Klein

and White (1996) state that a tautology “exists when terms are all defined by one another and there

is no possibility of disproving the statements” (p. 84). Turner (as cited in Klein & White, 1996)

argues that “reward is defined as that which is valued by the person [and that] the choice that a

person makes is the maximization of the profit. Thus, all actions are rewarding and the reason we

undertake an action is that it brings rewards” (p. 84). However, there are times when our actions

and choices do not bring rewards and we experience some type of cost associated with that choice.

Turner (as cited in Sabatelli & Shehan, 1993) states that “rewards, values, and actions appear to be

defined in terms of each other [and] it is impossible to find an instance when a person does not act
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in ways so as to obtain rewards” (p. 396). It is difficult to make distinctions between what people

perceive as rewarding and costly.

References

Bagarozzi, D. A. (1993). Clinical uses of social exchange principles. In P. Boss, W.

Doherty, R. LaRossa, W. Schumm, & S. Steinmetz (Eds.), Sourcebook of family theories and

methods: A contextual approach (pp. 412-417). New York: Plenum.

Berardo, D. H., Shehan, C. L., & Leslie, G. R. (1987) A residue of tradition: Jobs,

careers, and spouses’ time in housework. Journal of Marriage and the Family, 49, (2), 381-390.

Klein, D. M., & White, J.M. (1996). Family theories: An introduction. Thousand Oaks,

CA: Sage Publications, Inc.

Levinger, G. (1982). A social exchange view on the dissolution of pair relationships. In

I.F. Nye (Ed.), Family realtionships, rewards and costs (pp. 97-122). Beverly Hills, CA: Sage

Publications.

Nye, I. F. (1979), Choice, exchange, and the family. In W. R. Burr, R. Hill, I. F. Nye, &

I. L. Reiss (Eds.), Contemporary theories about the family (Vol.2) (pp. 1-41). New York: The

Free Press.

Nye, I. F. (1982). The basic theory. In I. F. Nye (Ed.), Family relationships, rewards and

costs (pp. 13-30). Beverly Hills, CA: Sage Publications.

Sabatelli, R. M., & Shehan, C. L. (1993). Exchange and resource theories. In P. Boss, W.

Doherty, R. LaRossa, W. Schumm, & S. Steinmetz (Eds.), Sourcebook of family theories and

methods: A contextual approach (pp. 385-411). New York: Plenum.

Schaffer, M. A., & Lia-Hoagberg, B. (1994). Prenatal care among low-income women.

Families in Society: The Journal of Contemporary Human Services, 75, (3), 152-159.
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Thibaut, J. W., & Kelley, H.H. (1959). The social psychology of groups. New York:

John Wiley.

Yogev, S. & Brett, J. (1985) Perceptions of the division of housework and child care and

marital satisfaction. Journal of Marriage and the Family, 47, (3), 609-618.