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Social Exchange Theory

Author(s): Richard M. Emerson

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Richard M Emerson
Ee'artment of Sociology -niversity of =ashington Seattle =ashington $3#$)
Euring the last fifteen years there has emerged in sociology and social 'sychology a
distinct a''roach called social exchange theory. >our figures were largely res'on*
si,le: Deorge Bomans 5ohn Thi,aut Barold Felley and +eter Glau. Bomans in
HSocial ,ehavior as exchangeH (#$)3) made a conscious effort to identify and ad*
vance this 'oint of view. @n #$&# he am'lified his argument in Social Behavior Its
Elementary !orms" which has now ,een revised (#$%1). Also in the late #$)2s
Thi,aut & Felley were constructing their com'act conce'tual scheme in #he Social
$sychology of %roups (#$)$). =hile different in im'ortant ways their wor9 con*
verged with Bomans7s strengthening the general exchange a''roach. =hen Glau7s
E&change and $ower (#$&1a) a''eared the exchange a''roach was assured a future
in the field.
The differences ,etween these three ma0or wor9s were as im'ortant in launching
the exchange a''roach as were their similarities. =hile Glau gave more em'hasis
to technical economic analysis Bomans dwelled more u'on the 'sychology of
instrumental ,ehavior. 4et in doing so he drew u'on a different ,rand of 'sy*
chology than that re'resented ,y Thi,aut I Felley. @n addition they em'loyed
different strategies of theory construction. Thi,aut & Felley start with 'sychologi*
cal conce'ts ,uild u'ward to the dyad and ,uild u'ward from there to the small
grou'. Bomans ta9es a more reductionist a''roach moving in the o''osite direc*
tion. =ith considera,le 9nowledge of grou'*level 'rocesses already in mind he
'oints to the 'sychological 'rinci'les of reinforcement which he claims hel' to
ex'lain them. Bowever +eter Glau contrary to ,oth of these a''roaches warns us
that 'reoccu'ation with 'sychology can ,lind us to the im'ortant emergent as'ects
of social exchange.
=hen three strong statements such as these diverge on 'articulars yet converge
on a central view'oint*social exchange as a frame of reference*that view'oint will
,e given greater im'etus. Cow seventeen years later exchange theory is still grow*
ingJ it still contains diversity and s'ar9s of controversy.
#he Scope of E&change #heory
@n setting the goals for this critiKue of social exchange theory we must understand
that it is not a theory at all. @t is a frame of reference within which many theories
*some micro and some more macro*can s'ea9 to one another whether in argu*
ment or in mutual su''ort. The sco'e condition for the exchange frame of reference
has ,een most sim'ly defined ,y Glau (#$&1a): HSocial exchange as here conceived
is limited to actions that are contingent on rewarding reactions from others.H
@m'lied is a two*sided mutually contingent and mutually rewarding 'rocess involv*
ing HtransactionsH or sim'ly Hexchange.H
That ,asic 'rinci'les of reinforcement 'sychology and microeconomics might ,e
relevant in studying social exchange (Bomans #$&#) is self*evident. @ndeed the
exchange a''roach in sociology might ,e descri,ed for sim'licity as the economic
analysis of noneconomic social situations. The social situations addressed ,y Bo*
mans Thi,aut & Felley and Glau were located largely in the informal social
interaction of small grou's. Exchange theory ,rings a Kuasi*economic mode of
analysis into those situations. 8an grou' 'ressure (Schachter #$)#) and mem,er
conformity (Boc9,aum #$)1) ,e ,etter viewed as two sides of a transaction involv*
ing the exchange of utility or reward: (See Bomans #$&# Emerson #$&1 Cord
#$&3). 8an status in a 'eer*grou' situation ,e examined through su''ly curves
and the law of diminishing returns (Glau #$&1): Should eye contact with a smile
which evo9es valued a''roval ,e studied as one transaction in an exchange rela*
The convergence among Bomans Thi,aut & Felley and Glau can ,e said to
converge in turn with other im'ortant wor9. At the micro level the study of
strategic interaction has strong affinities with an exchange a''roach. Eo we gain
anything ,y treating identity and 'resentations of self in social interaction as com*
modities of a sort su,0ect to gain or loss through im'licit ,argaining: +erha's the
line of research re'resented ,y =einstein I Eeutsch,erger (#$&1) 5ones (#$&1)
Dergen (#$&$) =einstein (#$&&) =einstein et al (#$&3 #$&$) Stires I 5ones
(#$&$) and Doffman (#$%2) will converge with the o'erant 'sychology of Bomans
and others. 8learly o'erant 'sychology is not the only starting 'oint for the study
of exchange. Garth (#$&&) in develo'ing an ex'licit exchange framewor9 in an*
thro'ology draws u'on this line of wor9.
>urther 'romising convergence ,etween exchange theory and role theory can ,e
found in the wor9 of Doode (#$%() research ,y Emerson (#$&3) and Stolte I
Emerson (#$%&).
At the macrosociological level exchange has ,een em'loyed in the analysis of
social stratification and the division of la,or (Emerson #$%",) in the study of
interorgani<ational relations (.evine I =hite #$&# 8oo9 #$% ),) and ur,an com*
munity structure and decision ma9ing (8lar9 #$&3). @n some discussions exchange
theory has ,een treated as a general theory 'arallel to structural functionalism
(8lar9 #$%" Ellis #$%#). @n 'olitical science (8urry I =ade #$&3) the exchange
a''roach has ,een offered as a general a''roach to 'olitical ,ehavior.
S68@A. EA8BACDE TBE6R4 ((%
6ne line of convergence in my 0udgment is es'ecially im'ortant. As Anderson
(#$%2 'ersonal communication) has o,served Hsociological exchange theory shades
into economic anthro'ology in a rather im'erce'ti,le way.H Ever since anthro'olo*
gists ,egan to focus attention on 'rimitive economics they have ,een engaged in
continuous de,ate a,out the 'ro'er 'lace of economic theory in anthro'ological
research*from Bers9ovits (#$12) to Schneider (#$%1). Stated ,riefly neoclassical
economic theory is organi<ed so heavily around rational individual decision ma9ing
in a 'erfectly com'etitive mar9et that its a''lica,ility to tradition*,ound or norma*
tively regulated ,ehavior outside of com'etitive mar9ets is 'laced in dou,t yet
goods are 'roduced and distri,uted through exchange. Therefore social exchange
theory is needed to deal with exchange ,ehavior in non*=estern economies (Bers9o*
vits #$12 Malinows9i #$"" .evi*Strauss #$&$ +olanyi et a##$)% Sahlins #$&)) and
also in =estern society outside of the 'erfectly com'etitive mar9et. LThis conver*
gence has ,een examined recently in an unfortunately doctrinaire manner ,y E9eh
+erha's @ cast too ,road a net. @ include within exchange theory items as diverse
as Gurgess & Ceilsen7s (#$%1) la,oratory study of reci'rocal o'erant reinforcement
in the dyad and +olanyi7s studies of Hreci'rocity redistri,ution and exchangeH in
com'arative economic anthro'ology (+olyanyi et al #$)3:"1(*%2). Bowever if @ err
it is more on the side of omissionJ for while the material is extremely heterogeneous
in mor'hological detail it is 0oined ,y analytic conce'ts*resource reward rein*
forcement cost utility o''ortunity 'rofit outcome transaction 'ayoff etc.
These conce'ts drawn from different fields and fashioned for use in different
contexts carry the 'romise of greater 'otential 'arsimony than their large num,er
might im'ly.
$lan of this Criti'ue
@n this 'a'er @ first examine what @ thin9 are the central conce'ts and some of the
main research to'ics within the exchange frame of reference. S'ecial attention is
given to ma0or controversies that s'ring from those conce'ts: rationality tautology
and reductionism. @ turn then to economic anthro'ology where the same generic
controversies are seen in the inter'lay ,etween economic theory and economic
anthro'ology. Those 'arallel de,ates are used to suggest a 'artial resolution: ex'licit
ado'tion of the social relation rather than either 'ersons or actions as the unit of
analysis. S'ringing from the relation as the unit of analysis ma0or differences are
o,served ,etween economic and social exchange theory.
>inally attention is focused on the 'eculiarly dyadic character of most exchange
analysis. The transition from micro or dyadic to macro exchange theory is ta9en
u' as the final to'ic of interest in the 'a'er.
Bomans (#$&$) has argued that ,ehavioral 'sychology contains the most general
laws a''lica,le to human social ,ehavior. Since society as he sees it consists of
,ehaving 'eo'le he suggests that social theory can ,e advanced ,eyond its currently
im'overished condition if 'rinci'les of reinforcement are included in sociological
ex'lanations. Thus Bomans issued a clarion call for a ,ehavioral 'sychological
form of exchange theory in sociology which has 'rovo9ed in reaction charges of
reductionism assumed rationality and tautological reasoning. It is essential there*
fore that we ,egin with an examination of some of the 'sychological under'innings
of social exchange theory in order to confront these im'ortant controversies. @n my
o'inion the charges of rationality tautology and reductionism have real su,stance
and warrant careful attention ,y exchange theorists. It is interesting that similar
issues have emerged in economic anthro'ology concerning the use of economic
theory in the study of 'rimitive exchange.
#he (perant !ormat
The variety of reinforcement 'sychology chosen ,y Bomans was S9innerian o'erant
'sychology. That school has two outstanding features. >irst it is characteri<ed ,y
its own methodology which evolved around the well*9nown S9inner ,ox. Second
it has assem,led a large ,ody of em'irical regularities o,tained through that
method with a minimum*if not an a,solute 'aucity****of theoretical inter'retation.
The o'erant research format ty'ically involves (a) a single su,0ect (b) studied
over an extended 'eriod of time (c) in a ,ounded environment that allows seKuen*
tial mani'ulation of stimulus conditions. That environment might ,e a nursery a
school for retarded children a hos'ital for a 'atient the S9inner ,ox for a 'igeon
or some other total institution. Thus in the ty'ical o'erant format (d) the ex'eri*
menter (or H,ehavior modifierH) en0oys real social 'ower over the su,0ect. Therefore
as we shall see o'erant 'sychology is the study of the effective use of social 'ower
in controlling ,ehavior.
>or a social exchange theorist o'erant research is seen to study an organism*
environment exchange system. .et us illustrate as Bomans did with the 'igeon in
the S9inner ,ox. .et the ,ox contain a light (Sl) that is either on or off and a disc
that the 'igeon might occasionally 'ec9 (R). @n addition the ,ox will occasionally
'rovide some stimulus we shall sim'ly la,el S" for now. Su''ose the ,ox is so
designed that: (a) if the light is on and (b) if the disc is 'ec9ed five times then
S" will occurJ after which another five 'resses will ma9e S" recurJ and so on for a
long time. Cow su''ose that 'igeons are so designed that: (c) if the 'igeon has not
encountered S" very often recently and (d) if disc 'ec9ing 'roduces S" then the
'igeon will 'ec9 the disc. -nder these conditions an e&change relation will form
,etween the 'igeon and its environment (the S9inner ,ox in this case). The 'igeon
will give out 'ec9ing ,ehavior R contingent u'on S" and the ,ox will 'rovide S"
contingent u'on R. The contingency is the one referred to ,y Glau a,ove in his
definition of exchange.
The next 'oint ,ears heavily u'on the logical structure of social exchange theory
as 'ut forth ,y Bomans. The o,served fact of disc*'ec9ing under the a,ove contin*
gencies is the defining condition wherein: Sl is la,eled a discriminative stimulus" or
SE R is la,eled an operant response" and S" is called a reinforcing stimulus" or
SR. These three ,asic conce'ts are defined in terms of their relation to one another
S68@A. EA8BACDE TBE6R4 (($
and they constitute three analytical elements in a single em'irical system*an
exchange relation. =e shall return to this 'oint ,elow when we discuss and attem't
to resolve the Kuestion of tautologies in social exchange theory.
The organism*environment exchange involved here can ,e seen clearly in the ratio
in contingency )b* a,ove. That contingency is called a schedule of reinforce+
ment" a fixed ratio schedule of )/# in this case called sim'ly an >R*) schedule. If
S" is one unit of grain then >R*) can ,e ta9en as the 'rice the 'igeon must 'ay in
disc 'ec9s in exchange for grain. 6'erant research has dwelt largely u'on the
efficacy of various schedules of reinforcement in o,taining favora,le exchange for
the ex'erimenter (the environment in our exam'le). =e learn that an >R*l is most
effective in drawing the 'igeon into an exchange relation (thus ma9ing him de'en*
dent and gaining 'ower over him). 6nce he has entered the relation we are told how
to Hthin outH the schedule to >R*" >R*( ... >R*(1% gaining more and more
,ehavior at less and less cost (in grain) to the ex'erimentor. =e are told ,y o'erant
research that if we shift from a fixed to a varia,le ratio (!R*A) then extinction is
slow. That is we can continue to get ,ehavior from the 'igeon after we have
terminated our side of the exchange.
@s it any wonder then that the two most 'rominent research to'ics in social
exchange theory are 'ower and 0ustice: 8an there ,e any more im'ortant to'ics for
study in sociology:
,omans- $ropositions
=hile 'igeons are not very interesting to sociologists Bomans reminds us that the
system outlined a,ove a''lies as well to 'eo'le. Be summari<es (#$%1) the system
descri,ed in the contingencies (a) ... (d) a,ove in three ,asic 'ro'ositions a,out
human ,ehavior:
.. #he Success $roposition. H>or all actions ta9en ,y 'ersons the more often a
'articular action of a 'erson is rewarded the more li9ely the 'erson is to 'erform
that actionH (under similar stimulus conditions)H ('. #&).
/. #he Stimulus $roposition. H@f in the 'ast the occurrence of a 'articular stimulus
or set of stimuli has ,een the occasion on which a 'erson7s action has ,een
rewarded then the more similar the 'resent stimuli are to the 'ast ones the more
li9ely the 'erson is to 'erform the action or some similar action nowH (''.
0. #he 1eprivation+Satiation $roposition. HThe more often in the recent 'ast a
'erson has received a 'articular reward the less valua,le any further unit of that
reward ,ecomes for himH ('. "$).
The reader should notice that these three 'ro'ositions corres'ond with three of the
elements a,ove (contingencies (d), (a), and (c), res'ectively) that 0ointly define the
,asic conce't of reinforcement. Since to reward means to reinforce it follows that
'ro'osition # cannot ,e falsified. @t is a noncontingent 'ro'osition. (See ,elow on
the issue of tautology.)
Bomans su''lements these three 'ro'ositions with others two of which should
,e introduced now. Be o,serves that rewards occur in varying magnitude and
accordingly he defines value as Hthe degree of reward.H (#$%1:")) Be then states two
'ro'ositions which @ ta9e to ,e refinements of 'ro'osition #. They are:
2. #he 3alue $roposition. HThe more valua,le to a 'erson is the result of his action
the more li9ely he is to 'erform the action.H ('. "))
#he Rationality $roposition. H@n choosing ,etween alternative actions a 'erson
will choose that one for which as 'erceived ,y him at the time the value 3" of
the result multi'lied ,y the 'ro,a,ility p, of getting the result is the greater.H
('. 1()
#he Issue of Rationality (perant $sychology 3ersus 1ecision #heory
The reader will a''reciate the fact that the terms reward reinforcement value and
utility have very nearly the same meaning in this discussion. Reward and value in
Bomans7s usage are eKuivalent to reinforcement and the magnitude thereof in
o'erant language. @n economics and decision theory (Barsanyi #$&& and others)
utility - is em'loyed where Bomans uses ! in the Rationality +ro'osition. The
element p is a su,0ective 'ro,a,ility estimate or Hex'ectationH in decision theory
and it corres'onds with the freKuency of reward in 'ro'osition #. Add to all of this
the fact that the well*9nown and im'ortant 'rinci'le of diminishing marginal utility
in economic theory ex'resses the same idea as the de'rivation*satiation 'ro'osition
and it ,ecomes very clear that o'erant 'sychology and economic decision theory
offer alternative starting 'oints for social exchange theory. @n my o'inion it ma9es
very little difference which of these traditions one chooses ,ut there are some
differences we should ,e aware of.
The first of these is the trou,lesome 'ro,lem of rationality in human social
interaction. @n one 'lace Glau defined exchange ,ehavior to mean Hvoluntary actions
of individuals that are motivated ,y the returns they are ex'ected to ,ring*.H
(#$&1a:$#) These words along with the rationality 'ro'osition a,ove seem to
descri,e 'eo'le ma9ing conscious choices ,ased u'on self*interested deli,eration
'rior to ta9ing action. Gierstedt (#$&)) in his review of Glau7s ,oo9 sim'ly dou,ts
that much of human social action is ,ased u'on such considerations. @ am inclined
to agree with him. >urthermore while 'eo'le and firms sometimes act with such
deli,erate rationality @ do not want to limit social exchange theory to that narrow
class of actions. @ndeed a wide range of ,ehavior studied within exchange theory
*gift giving relations of reci'rocity and the norm of reci'rocity (Mauss #$")
Sahlins #$&) Douldner #$&2)*is ex'licitly not Hmotivated ,y the returns they are
ex'ected to ,ringH as Glau 'uts it.
4et we have the 'aradox that such ,ehavior usually does ,ring returns. The
reci'ient of a gift is somehow o,ligated to 'rovide a return (Douldner #$&2) even
though it is unseemly for the giver to ex'ect one. 6n this to'ic reinforcement
'sychology and economic decision theory differ mar9edly. @t is generally understood
or assumed in economic theory that an intelligent and well*informed actor formu*
lates 'ro,a,ilities and estimates ex'ected utilities for alternative actions 'rior to
deciding and acting. HRationalityH in human ,ehavior can refer to these 'redecision
cognitive 'rocesses together with the decision rule stated in the rationality 'ro'osi*
S68@A. EA8BACDE TBE6R4 (1#
tion. Gy contrast any reader who feels that 'eo'le in their social relations with each
other act more on sentiment and ha,it than u'on such reasoned decision ma9ing
should find Bomans and o'erant 'sychology much more 'alata,le. The o'erant
a''roach to social exchange allows ,ut does not reKuire such rationality. @n 'lace
of calculation and reason in human affairs it relies u'on value as the result of 'rior
conditioning in longitudinal exchange relationshi's. A gift given to a friend without
ex'ectations of return can fail to recur over time when it is not reci'rocated. The
friendshi' might die or fail to form in a 'rocess of reinforcement that entails no
rational element at all. The issue then is not the 'rior calculation of the giver*
it is the unfolding future of the relation. Difts and 'arty invitations are not always
reci'rocated in which case they don7t get re'eated.
The a,ove inter'retation is a straightforward a''lication of the ,asic o'erant
format. @ am led to re0ect 'rior calculation of returns as a defining feature of
exchange in favor of a much ,roader ,ase*social o'erant ,ehavior.7 The latter
includes ,ut is not confined to the former. Social o'erant ,ehavior is ,ehavior
whose level or freKuency of 'erformance over time is sustained ,y reinforcing
(rewarding) activity from other 'eo'le. @f the emotion and accom'anying ,ehavior
called HloveH with all of its irrational self*denial in 'ursuit of the other7s welfare
is sustained in the long run only ,y reci'rocal love (among other su''orting re*
turns) then the love relation is a''ro'riately analy<ed within the exchange a'*
@ ,elieve this 'osition is essentially what Bomans outlined. 6n the issue of 'rior
'lanning and deli,erate choice 'eo'le are sometimes more li9e 'igeons than li9e
entre'reneurs ,ut entre'reneurs are 'eo'le. Thus rationality inthe sense of action
,ased u'on 'rior calculation of ex'ected returns forms one 'art of a larger su,0ect
matter of social exchange.
#he Issue of #autology
Goth 'igeons and 'eo'le might ,e considered HrationalH in a less cere,ral sense
meaning only that they tend to act so as to maximi<e reward and minimi<e cost over
time or in the long run. Bere also the o'erant*,ased a''roach of Bomans differs
:mar9edly from the economic or decision theory a''roach. Bomans7s 'ro'ositions @
and @@@ agree with decision theory in asserting reward or utility maximi<ation over
the long run ,ut they assign a different logical status to this assertion.
>or economists and decision theorists rationality is either offered as an assum'*
tion for very good theoretical reasons or it is offered as a normative model for
Ha''ro'riateH ,ehavior. Gy contrast Bomans seems to offer his version*'ro'osi*
tions @ and @@@*as em'irical truths demonstrated in the S9innerian la,oratory.
7@n stating my 'reference for reci'rocal o'erant ,ehavior rather than maximi<ing decisions
as a sco'e condition @ in no way advocate or ado't HS9innerianH 'sychology or any other
,ehaviorist 'osition. The word social operant is used here sim'ly as a short and well*under*
stood way of saying ,ehavior that is formed and sustained or changed over time or through
re'eated occasions in a way that is contingent u'on valued returns (reinforcement) from other
-nfortunately neither S9inner nor anyone else has or will 'rove them through
em'irical research for they are ,oth untesta,le. As a result (a) Bomans7s scheme
has often ,een challenged on grounds of tautology and (b) with 'ro'ositions @ and
@@@ removed we are left wondering what contri,ution o'erant 'sychology really does
ma9e to social exchange theory. (See Emerson #$%"a for a la,orious effort to answer
this Kuestion.)
Bowever the a,ove assertions must ,e ex'lained. Bomans has ta9en great care
to defend his scheme against charges of tautology ,oth in #$&# and #$%1 yet the
charges 'ersist. =hy: And does it really matter:
The 'ro,lem lies at the heart of exchange theory with the most im'ortant
conce'ts of all: reward and value. Bomans feels that the success 'ro'osition (#) is
safe from this challenge ,ecause res'onse freKuency and reinforcement (reward)
freKuency can ,e inde'endently measured (#$%1:((*(1). They can ,e ,ut that is not
the 'oint. They do not have inde'endent meaning: a reward is ,y definition a
stimulus conseKuence that increases or maintains res'onse freKuency. Therefore
'ro'osition # cannot ,e wrong. It cannot ,e tested. All we can do is use itJ use it
in logical chainsJ use it to determine what is and is not a rewarding stimulus. @f the
'igeon in the S9inner ,ox did not 'ec9 the dis9 when the dis9*'ec9 'roduced food
the 'igeon might die ,ut 'ro'osition @ would live on in good health. It is a logically
useful ,ut untesta,le formulation. As =al9ins (#$%2: #%"*%$) has so elegantly
shown we as social scientists cannot logically organi<e our wor9 without some
'ro'osition lin9ing value to action.
Thus if we need 'ro'osition # or something li9e it does it matter whether its
truth de'ends on fact or u'on definition: @f we are not clear a,out which form of
truth to assign to it then our thin9ing gets muddled. >or exam'le we might design
ex'eriments intending to HtestH a 'ro'osition that is true ,y definition. 8ros,ie
(#$%") conducted such an ex'eriment. Coting that Hfew if any attem'ts have ,een
made to directly test Bomans7 original 'ro'ositionsH 8ros,ie set out to test the
eKuivalent of +ro'ositions # ( and 1 a,ove. Be conducted an ex'eriment in which
su,0ects could either com'ly with reKuests or not com'ly when rewarded for com*
'lying. HThe reward selected was Tandem note,oo9s*. It was felt that these would
have an initial reward value to the student su,0ects.H
Thus with note,oo9s assumed to ,e rewarding the ex'eriment 'ur'orted to test
certain general hy'otheses. It was found that su,0ects com'ly more when given
note,oo9s than when not given anything (the success 'ro'osition)J su,0ects com'ly
more for two than for one note,oo9 (the value 'ro'osition)J and the increment of
increased com'liance goes down with additional note,oo9s accumulated (the de'ri*
vation*satiation 'ro'osition). Gut su''ose the results had ,een different: @ su,mit
that if su,0ects had not com'lied in the a,ove 'attern the initial assum'tion*that
note,oo9s were rewarding*would have ,een re0ected. Su''ose further that the
ex'erimenter had some other inde'endent evidence that note,oo9s were rewarding
to those su,0ects yet failed to get com'liance in exchange for note,oo9s. =ould we
then ,e forced to re0ect +ro'ositions @ and @@@ as false: Co we would then conclude
that the value of noncom'liance is greater than the value of note,oo9s to those
su,0ects. @n fact +ro'ositions @ and @@@ are not at issue in this ex'eriment. They are
true. They are useful not testa,le.
The utility of such 'ro'ositions in the logic of ex'lanation is well discussed ,y
=al9ins (#$%2). That there are uses (as well as misuses) for tautologies is shown ,y
.is9a (#$&$). Their value in ex'erimental research can ,e illustrated with a study
that was organi<ed on a logical structure very different from the a,ove ex'eriment.
8o<,y (#$%") set out to discover whether or not intimate revelations are valua,le
to receive and costly to give ,y o,serving the reci'rocation of intimacy in the social
exchange 'rocess.
#he Issue of 4E&planation4 3ersus $rediction
Gut the issue of tautology has other facets to it. The fact that Bomans7s 'ro'ositions @
and @@@ are not testa,le im'lies only that they should ,e em'loyed as assum'tions
rather than as em'irical contri,utions from o'erant 'sychology. @t does not im'ly
that Bomans7s current use of those 'ro'ositions is circular or tautological. As
Mee9er (#$%# :13&) has o,served
... rationality can easily ,ecome tautologicalJ if we 'redict that 'eo'le choose what they
value and find out what they value ,y o,serving what they choose we have not accom*
'lished much exce't to descri,e choice ,ehavior.
@n formulating his 'ro'ositions Bomans was fully cogni<ant of the danger de*
scri,ed ,y Mee9er and he devoted several 'ages to discussing it (#$&# :1"*1(
#$%1:((*()). If one has inde'endent 9nowledge of what a 'erson finds rewarding
then 'ro'ositions # or ( can ,e em'loyed in ex'laining or 'redicting a 'erson7s
,ehavior. Some exam'les will hel':
#. =hy does grou' mem,er A HconformH to grou' norms:
(a) +ro'osition ( (assumed):
(b) mem,er A is 9nown to value a''rovalJ and
(c) mem,ers G 8 ... C give him a''roval when he conforms.
(d) Therefore A conforms.
". =hy does 'olitician A advocate the 'olicies he does:
(a) +ro'osition ( (assumed):
(b) A needs cam'aign contri,utions and
(c) grou' 4 contri,utes heavily contingent u'on the 'olicies he advocates.
(d) Therefore A advocates certain 'olicies.
(. =hy does 5ohnny mis,ehave when com'any is in the house:
(a) +ro'osition ( (assumed):
(b) 5ohnny is 9nown to value his 'arents7 attentionJ
(c) his 'arents attend to him when he mis,ehaves in front of com'anyJ
(d) Therefore 5ohnny mis,ehaves around com'any.
The reasoning is not circular so long as our 9nowledge of (b) is not derived from
our 9nowledge of (d). Bomans was himself careful on this 'oint. 4et des'ite his
caution Bomans7 critics accuse him of tautological reasoning (See Eeutsch #$&1).
If one must ,e so careful to avoid circular reasoning when using the reward*cost
framewor9 and is li9ely to ,e accused of circularity des'ite such care then there
must ,e still other flaws of some sort hidden within reward*cost analysis. @ sus'ect
that the charge of tautology s'rings from two other 'ro,lems ,oth of them more
su,tle and illusive in nature. The first involves ad hoc ex'lanation*the difference
,etween hindsight and 'rediction. The second relates to controversies a,out 'sycho*
logical reductionism.
The a,ove exam'les of ex'lanation ,ased on rewards will hel' us see the issue.
The logical seKuence from (a) to (d) is not circular ,ut unfortunately it does not
follow as a relia,le 'rediction either. =hile all 'oliticians value cam'aign money
and while all might have their 'rice we do not 9now whether or not the H'rice is
rightH until after the fact of (d). =hile most 'eo'le value social a''roval we can
seldom measure that value along with the cost of conformity well enough to 'redict
that one will conform in exchange for a''roval. The same a''lies to the child in
exam'le ( and in any other exam'le one cares to mention. =hile we must have
evidence of (b) inde'endent of (d), (d) is almost always the ,est evidence we can
o,tain. And we have it first in the context of ex'lanation rather than 'rediction. To
'redict exchange ,ehavior from values 'oses 'rofound measurement 'ro,lems in
the situational assessment of relevant values. Bowever Hex'lanationH is a9in to
hindsight and this is far less demanding 'recisely ,ecause we can assess values from
the conseKuent exchange ,ehavior. @f we do however the ex'lanation is circular.
#he Issue of Reductionism
@n addition to the a,ove logical and em'irical grounds for sus'ecting ex'lanations
couched in terms of reward there is another source of dou,t relating to the common
charge of reductionism. The exam'les listed a,ove ta9e as given an exchange 'rocess
,etween two 'arties. They then em'loy the ,ehavior of one 'arty to ex'lain the
,ehavior of the other. Gut the actions are reversi,le: why do fellow grou' mem,ers
a''rove of mem,er A: (a) +ro'osition ( (b) they are 9nown to value conformityJ
(c) mem,er A conformsJ therefore (d) he is a''roved of. =e now ta9e as given
(conformity) what was 'ro,lematic in the a,ove exam'le.
Sociologists who are s9e'tical of the 'ossi,ility or desira,ility of 'sychological
reductionism would have reason to as9 at least three Kuestions at this 'oint. >irst
when two actions are Hex'lainedH each ,y the other have we ex'lained anything
or have we sim'ly descri,ed a reci'rocal social 'henomenon: Second ,y what right
can we*or for what reason should we*se'arate a single social event (the exchange
of conformity for a''roval) into two Kuasi*inde'endent individual acts each to ,e
ex'lained: And third if we view the social relation as ex'lained when the contri,ut*
ing actions of each 'arty have ,een Hex'lainedH as a,ove what other features of
the social relation are li9ely to ,e overloo9ed or left unexamined due to our 'ossi,ly
'remature sense of com'rehension: This @ ,elieve is the 'oint 'osed ,y Glau
(#$&1) in warning us to ,e alert always to 'ossi,le emergent 'henomena in the study
of social exchange.
The warning issued ,y Glau is worth heeding if only for the 'ractical reason that
'sychology has not yet attained ,ehavioral omniscience.
@n +art @ @ suggested that four disci'lines contri,ute to the exchange a''roach.
Bowever our discussion so far has drawn largely u'on wor9 in 'sychology and
sociology. There we have seen that when reinforcement 'sychology is a''lied to
social situations certain controversies emerge concerning issues of rationality tau*
tology and reductionism.
Turning to the other two fields we find an interesting and informative 'arallel.
@n economic anthro'ology where economic theory encounters anthro'ological
data the same issues emerge and have ,een even more vigorously de,ated. >or
instance 8ohen (#$&%: #21) 'oints out that there are several modes of economic
analysis ,ut the one most dominant the one Hwhich some economists now consider
the ,asic method of their science*rests on the assum'tion*that men will see9 to
maximi<e their gains ,y o,taining the highest 'ossi,le return for any given re*
sources. Gut when this assum'tion is a''lied in many anthro'ological settings
8ohen o,serves (#$&%: #2&) that it
... ,ecomes little or nothing more than a self*defeating tautology. Any action can ,e
said to maximi<e sorneone7s gainJ if a man fails to o,tain the highest 'ossi,le 'rice for
his goods ,ecause of his im'atience to Kuit the mar9et then he could ,e said to have
maximi<ed his gain since the 'ros'ect of additional monetary gain is inadeKuate to
outweigh some other advantage such as attending a ceremony. Since he is maximi<ing
his gain whatever he does the conce't can hardly have ex'lanatory value. (This difficulty
has ,een noted ,y >irth #$($:")*"2.)
=e need not re'eat our earlier analysis of rationality and tautology. The im'or*
tant 'oint is sim'ly the 'arallelJ ,etween economics and anthro'ology and ,etween
sociology and reinforcement 'sychology the same issues emerge. =e should ,e a,le
to learn some lesson from these 'arallel de,ates.
Social Relations as 5nits of Analysis
Much of the controversy a,out rationality tautology and reductionism is easily
resolved. @t only reKuires that we ado't ex'licitly the social exchange relation as the
,asic unit of analysis. This is dictated in 'art ,y the nature of the conce't of
reinforcement. The a,ove discussion ,egan with the o,servation that Rand SR the
reward and the o'erant ,ehavior rewarded are defined in terms of each other. They
form a single conce'tual and o,servational unit the 'arts of which are only analyti*
cally se'arate. Since these two elements s'an ,oth sides of the exchange relation (e.g.
R;conforming ,ehavior ,y a grou' mem,er and SR;social a''roval from the
grou' 'rovided in exchange for conformity) it seems essential that we ta9e the
social relation as an integral o,servational and conce'tual unit. @t is my contention
that the a,ove confusion concerning the issues of rationality tautology and reduc*
tionism s'rings directly from a failure to honor the integrity of the social relation
as a unit of analysis.
To ma9e this 'oint as clear as 'ossi,le consider three different units of em'irical
o,servation: actions or decisions ,y individualsJ transactions ,etween individualsJ
and exchange relations as series of transactions ,etween the same individuals. 6n
a 'hiloso'hical 'lane no one of these units can claim to ,e more real than another.
The fact that 'ersons can ,e 'inched ma9es them no more su,stantial than social
relations. That exchange relations are com'osed of actions gives actions no em'iri*
cal 'rimacy over relations. >or exam'le the act of giving a gift ta9es 'lace within
a social relation and such an act evolved as 'art of a social relation. Most o'erant
acts evolve within such relations. As >irth (#$&%:1) has 'ut it:
There is in social anthro'ology an understanda,le view that it is the social relation
which is 'rimary which dictates the content and form of the transaction.
>irth Kuotes Sahlins (#$&): #($) on the same 'oint:
A material transaction is usually a momentary e'isode in a continuous social relation.
The social relation exerts governance: the flow of goods is constrained ,y is 'art of a
status etiKuette.
There is a long tradition in sociology and anthro'ology that inclines us to focus u'on
social relations viewing individuals and actions as 'urely analytic elements within
such relations. Rather than studying the actions of leading 'eo'le we study leader*
follower role relationsJ rather than s'ea9ing of the 'ower of 'ersons we s'ea9 of
'ower*de'endence relationsJ etc.
=hen the relation is ex'licitly ado'ted as the unit of analysis the 'ro,lem of
tautology dissolves and the closely related 'ro,lem of value measurement is signifi*
cantly eased. Recall that the o'erant ex'eriment outlined in +art @@A does not
ex'lain the 'igeon7s ,ehaviorJ rather it descri,es it as 'art of an organism*environ*
ment exchange. @n so doing it 'rovides a ,asis for measuring the value of SR to the
'igeon. Similarly if we descri,e the social exchange relation in which a grou' gives
a 'erson a''roval or status in return for his conformity (exam'le # in our discussion
of tautology a,ove) this gives us ,y far the ,est handle we now have on the
measurement of the value attached to a''roval (and to conformity). 6f course in
ta9ing the relation as the em'irical and conce'tual unit we forego the right to
ex'lain the individual7s ,ehavior in terms of his own values. Gut what im'ortant
insight do we lose when we give u' this sort of Hex'lanation:H
#he Social E&change Relation
Gased on the a,ove discussion of the 'rimacy of the social relation it is now clear
that Bomans should have included the ,ehavior of S9inner along with that of the
'igeon. Sociologists should find the 'igeon7s ,ehavior interesting only when viewed
within the integral exchange relation which in fact the 'igeon shared with +rofessor
S9inner. 5ust as the 'igeon develo'ed and re'eated his 'ec9ing ,ehavior under
continuing reinforcement from S9inner so S9inner develo'ed and re'eated his style
of ex'erimentation under continuing reinforcement in the form of 'atterned 'igeon
,ehavior. The S9inner Gox 'rovided the interaction medium through which a
reci'rocal social relation develo'ed over time ,etween the su,0ect and the ex'eri*
mentor. That social relation minimal as it might ,e in some res'ects is a good
exam'le of what will ,e called an exchange relation meaning sim'ly that in studying
the relation we 'ay s'ecial attention to the reci'rocal flow of valued ,ehavior
,etween the 'artici'ants. =ords such as transaction and e&change im'ly*Kuite
correctly*that the flow is inherently reci'rocal.
Elsewhere @ have recommended (Emerson #$%",) that we ado't the ex'ression
AAiJ GyM as a notation for identifying exchange relations where A and G are actors
(either 'ersons or cor'orate grou's) and where x and yare HresourcesH introduced
into exchange ,y A and G res'ectively. =e understand that x is o'erant ,ehavior
on A7s 'art which means nothing more than the defining fact that its continued
'erformance is contingent u'on (at least occasionally) 40 from G which is simulta*
neously the defining fact esta,lishing 40 as a reinforcer or reward for A. =hile a
symmetrical relation (in which 40is also an o'erant reinforced ,y x.) is not logically
reKuired theory suggests that em'irical instances of 'urely unilateral reward will
,e extremely rare and transitory in nature. (See Emerson #$%", on social 'ower.)
The ,asic elements of the o'erant research format listed a,ove should ,e reexam*
ined now for they 'oint u' some of the features of exchange relations ta9en as units
of analysis. They entail a longitudinal series of transactions ,etween two identified
'arties. The conce't of reinforcement defined a,ove reKuires a series of x and y
transactions. This longitudinal feature of social exchange relations is im'ortant as
we shall see s'ecifically ,ecause most economic theory systematically ignores itN
Basic Concepts
@ have 'ost'oned a review of ,asic conce'ts in order first to esta,lish the relation
as the unit of analysis. =e may now examine ,asic conce'ts with the ex'licit
understanding that most of them are em'loyed as analytic tools within such ex*
change relations.
The voca,ulary of social exchange theory today*reward reinforcement cost
value utility resource com'arison level transaction 'rofit outcome etc*is an
unconsolidated ,lend of ordinary s'eech and the technical voca,ularies of research
disci'lines nota,ly 'sychology and economics. Gut des'ite the redundant array of
words the ,asic conce'tions are few in num,er and their meaning is fairly sta,le.
Reinforcement" as defined in +art @ is clearly the most sim'le and fundamental
'oint of de'arture for most of the other conce'ts.
#. >or exam'le a reward is virtually synonymous with a 'ositive reinforcement ,ut
with the added connotation of ,eing socially administered.
". Similarly a resource is an a,ility 'ossession or other attri,ute of an actor giving
him the ca'acity to reward (or 'unish) another s'ecified actor. Any a,ility
"The character of the contingency involved in the exchange of x and y differs in different
modes of social interaction. 6n one extreme is the seemingly noncontingent HgiftH of x
occurring as a se'arate act ,y A which has no easily a''arent connection either in time or
in intention to any s'ecific reci'rocating act ,y G yet is 'erformed within a social relation
that is sustained ,y YI' or normatively 'rescri,es that y will occasionally occur. This is the
'attern of social reci'rocity discussed at length ,y Sahlins (#$&( #$&)) Douldner (#$&2) and
others. At the other extreme is overt negotiation ,argaining or other 0oint*decision 'rocess
that lin9s x and y in a one*to*one 'airing to form concrete transactions.
'ossessed ,y +erson A is a resource only in relations with s'ecific other 'ersons
who value it. Therefore strictly s'ea9ing resources are not 'ossessions or at*
tri,utes of individual actors ,ut rather they are attri,utes of the relationshi'
,etween actors.
(. Co conce't is more im'ortant or more confusing than value. 4et again its ,asic
meaning is fairly clear and can ,e stated ,est in terms of reinforcement. The
value of a unit of some stimulus (x or y) is the magnitude of reinforcement
affected ,y that unit. =e use the term value when dealing with reinforcement
as a scalar varia,le.
@ ta9e this conce'tion of value directly from Bomans (#$&#). Economists have
em'loyed the conce't of utility in referring to essentially the same notion: the
su,0ective 'sychological value (i.e. amount of reinforcement) an individual derives
from a good or service. Aside from the su,0ective status of utility a9in to some unit
of satisfaction as com'ared with the 'urely o'erational meaning assigned through
the o'erant format @ 9now of no im'ortant difference ,etween utility and value as
the latter is em'loyed here.
The value of a unit of SR has ,een further ela,orated resulting in four derivative
conce'tions worth mentioning: )a* value thresholds or standards called comparison
levels ,y Thi,aut & FelleyJ )b* the 'henomenon of satiation*de'rivation and the
related economic conce't of diminishing marginal utilityJ (c) 'reference orders and
value hierarchiesJ and (d) the conce't of costJ nota,ly rewards foregone or the
notion of o''ortunity costs from economicsJ and aversive stimulation.
86M+AR@S6C .E!E.S (8.) The amount of SR o,tained 'er transaction over a
series of transactions with a given environmental source ,ecomes over time a
neutral 'oint on the scale of value for SR. (>or exam'le a child7s wee9ly allowance
from his 'arents for s'ecified duties or general good ,ehavior might ,e A dollars.
The child after value ada'tation to that level will act as though de'artures from
A carry greater value 'ositive or negative than A itself).
The ada'tation level for valued stimuli has ,een recogni<ed ,y different authors
in different ways. Garon (#$&&) writes a,out a standard of social reinforcement
formed as an internal norm or frame of reference for res'onding to the ,ehavior
of others. Bomans (#$&#) s'ea9s of the ex'ression of anger when SR occurs ,elow
the ex'ected level. 6ne of the ,est 9nown and most fully develo'ed discussions was
offered ,y Thi,aut & Felley (#$)$) under the name of comparison levels (8.). The
conce't 'lays a crucial role in their discussion of the evaluation of the dyad ,y its
HE@M@C@SB@CD MARD@CA. -T@.@T4H The value of a unit of any ty'e of rein*
forcer SO is a decreasing function of the num,er of units recently received (or
currently 'ossessed). This 'rinci'le called satiation*de'rivation in ,ehavioral 'sy*
chology is an em'irical generali<ation descri,ing every rewarding stimulus as 'art
of a feed,ac9 system a cy,ernetic or self*regulating system. The organism acts in
such a way as to avoid ,oth under* and overeating*or drin9ing 'laying or stimula*
tion in general. .ur9ing ,ehind this em'irical 'rinci'le is the interesting conce't
of need*a conce't that in my o'inion we should develo' rather than derogate.
Meanwhile the em'irical generali<ation is extremely general. >or exam'le social
a''roval is considered ,y Bomans and others to ,e an im'ortant generali<ed
reinforcer. It has ,een shown to ,e more reinforcing to 'ersons relatively de'rived
of it than to 'ersons more satiated with a''roval (Eric9son #$&") des'ite the fact
that generali<ed reinforcers are thought to ,e less su,0ect to satiation effects. @n the
ex'eriment ,y 8ros,ie descri,ed a,ove it was shown that note,oo9s for students
are su,0ect to diminishing utility. Students HneedH some ,ut not many.
86ST @f reward is the most common word cost is the most trou,lesome word in
the exchange voca,ulary. It has two ,asic meanings:
#. 8ost in the form of aversive stimuli encountered in a social transaction (e.g.
'ainful or ,oring Hwor9H 'erformed)
". H8ostH in the form of rewards foregone (e.g. time and effort that could have ,een
s'ent otherwise for some other valued return).
@n economic theory the analysis of cost is fairly sim'le ,ecause in 'ractice only
meaning (") is involved through the conce't of o''ortunity costs. Gut social ex*
change theorists with their concern for 'sychology add another trou,lesome layer
of meaning.
8onsider an ordinary exam'le. A 'erson hurries six ,loc9s through a heavy
rainstorm to meet a friend in a tavern. Be enters wet and laughing s'ends an hour
or so and then goes home ,y ,us to dinner. Be could have ta9en the ,us straight
home avoiding the rain and en0oying a ,oo9 and a solitary glass of wine ,efore
dinner. Cow most exchange theorists in social 'sychology (Thi,aut & Felley
Bomans may,e Glau) write as though such an e'isode involved a choice ,etween
the two 'aths of action which can ,e analy<ed in some hedonistic calculus. Thus
rl * 8l * 8" < 2J where rl is the reward of a friend in a tavern 8l is the aversive
cost of running in the rain and 8" ; r" the reward (foregone) of a ,oo9 with wine.
=e cannot re'eat the discussion of rationality tautology and reductionism ,ut
all of those issues rise again with the conce't of cost. @f we assume that social life
'roceeds as a flow of choices made ,y individuals (Hshall @ go straight home to my
,oo9 or shall @ meet my friend or ... or ... :H) then our theory is tra''ed into
the a,ove hedonistic calculus. @f we assume instead that social life consists of
longitudinal social relations forming changing and maintaining over time then
every feature of the a,ove exam'le can ,e seen in a different slant. @s a run in the
rain HcostlyH when it is ex'erienced within a long*term friendshi'7f @f a driving rain
H=hen a rat 'resses a lever a 'igeon 'ec9s a dis9 or a man runs in the rain is that HcostlyH
effort or is it rewarding exercise: It has ,een shown that ,oth rats and 'igeons 'refer to Hwor9H
for their food rather than eat free food (Ceuringer #$&$ 8arter I Ger9owit< #$%2). Similarly
'u<<ling ,ehavior a,ounds at the human level. 8ognitive dissonance theory has develo'ed a
line of research around a similar 'henomenon calling it effort 0ustification. My 'oint is sim'ly
this: we are 'rofoundly ignorant a,out the nature of rewards and costs*and we shall remain
so until value is studied as a de'endent varia,le.
forces me to cancel a 'lanned meeting has much reward ,een foregone when the
friendshi' continues through other meetings: Eoes the ,oo9 and wine foregone add
HcostH to the friendshi' when the ,oo9 and wine has its own long*term time and
=ith the exchange relation as the unit of analysis we see an actor engaged
simultaneously in numerous exchange relations each com'eting with some of the
others for a commitment of resources. @ sus'ect that a value hierarchy forms to
regulate such commitment of resources.
=e already have in economic theory a fairly well*develo'ed theory of exchange.
Ceed anthro'ologists and sociologists formulate another one: @s social exchange
theory sim'ly ,orrowing conce'ts from economics*changing the words 'erha's
and a''lying them in different situations ,ut ma9ing no fundamental theoretical
=hile it is too early to offer definitive answers to these Kuestions @ ,elieve that
a 'rofound difference is ,eginning to emerge clearly se'arating social from eco*
nomic exchange theory. The difference @ will argue stems from the conce'tual units
of analysis em'loyed*longitudinal exchange relations versus ahistorical individual
decisions. The difference can ,est ,e seen however in that most im'ortant invention
of economics the conce't of the com'etitive mar9et as a theoretical construct.
#he 4Mar6et4 as Simplifying Concept
As >irth (#$&%:)) has o,served Hmar9etH is used in three ways: the mar9et'laces
where many 'eo'le assem,le to engage in transactionsJ the mar9et for some s'ecified
good or serviceJ and the mar9et 'rocess
... im'lying the allocation of resources ,y references to im'ersonal criteria which
disregard 'ersonal ties and social ends in favor of an immediate maximi<ation 'rinci'le
of 'rofitma9ing. It is this conce't which has ,een selected 'articularly for distinction as
the criterion se'arating the ty'es of economic systems studied ,y economists from those
studied ,y anthro'ologists.
=hat >irth says for anthro'ology is true for sociology as well. Economic theory
is heavily organi<ed around a set of assum'tions*the 'erfectly com'etitive mar9et
*which social exchange does not ma9e. Those assum'tions as stated ,y +erroux
(#$)2: #$2) reKuire that
... goods and services exchanged are homogeneous and 'erfectly and indefinitely divisi*
,leJ if they move without resistance or friction within one industry or from one industry
to another under the influence of an alteration in the level of their remuneration ...
1My concern here is that conce'ts such as o''ortunity cost or reward foregone ,orrowed
from a science of decisions (economics) might reKuire ma0or modification when im'orted into
a science of longitudinal social relations (social exchange theory).
The ma0or source of resistance or friction disallowed in this mar9et construct are
the very 'ersonal ties and social ends referenced ,y >irth as features of the exchange
'rocesses studied ,y anthro'ologists. Those 'ersonal ties are of course attri,utes
of longitudinal exchange relations that can hardly ,e set aside or assumed away ,y
social exchange theory ,uilt as it is u'on relations as the ma0or conce'tual unit.
The conseKuence of this difference is fairly 'rofound. HRealH social structures that
deviate su,stantially from the 'erfect mar9et*and most structures do*constitute
trou,lesome im'erfections in economic analysis. =hen economic analysis attem'ts
to incor'orate those im'erfections economic theory loses much of its 'ower and
elegance. Gy contrast social exchange theory seems to ,e forming s'ecifically to*
ward the analysis of such real ,ut im'erfect social structures*that is social struc*
tures involving fairly long*term relations ,etween 'eo'le in which 'ower is neither
diffuse nor eKually distri,uted as 'erfect com'etition im'lies (see Rothschild #$%#
on the a,sence of 'ower in neoclassical economic theory).
If economic and social exchange theory se'arate on the conce't of mar6et" we
must address two Kuestions. >irst what does the conce't do for economic theory:
Second what might social exchange theory incor'orate in its 'lace:
6n the first Kuestion the economist 8oddington (#$&3:") gives us a fine analysis:
@n the theory of mar9ets it has ,een 'ossi,le to deal theoretically with the interaction
of many economic actors ,y su''osing that each one acts in an HenvironmentH character*
i<ed ,y some re'resentations of the aggregate ,ehavior of all remaining actors ... This
a''roach to micro*economics has ,een 'articularly enlightening in circumstances involv*
ing a large num,er of economic units. @t is well*9nown however that 'rocesses involving
only a small num,er of economic units 'ose many theoretical 'ro,lems which arise from
the much stronger interde'endence of the actors ...
@n the economic theory of com'etitive mar9et 'rocess theoretically managea,le
sim'licity is achieved ,y conceiving a de'ersonali<ed other 'arty called a mar9et.
The analytic virtues achieved through the sim'lifying mar9et assum'tion come
at a high cost: the theory cannot deal with exchange ,etween interde'endent actors.
Two immense fields of study are left for other theories to contend with: (#) the
'rocess of interactive exchange ,etween interde'endent actors (called an e&change
relation here)J who are located in (") im'erfect social structures among larger
num,ers of interde'endent actors.
E&change in Bilateral Monopoly
It is a 'aradox of economic theory that it fails to handle the most sim'le social
structure the dyad. This is a 'aradox only ,ecause the dyad is too im'ortant in
economics to ,e ignored and therefore has ,een given a lot of attention. It is treated
as isolated exchange or ,ilateral mono'oly.
=hen the mono'olist faces a mar9et involving many actors he may regard the re*
s'onses ... as Kuite adeKuately re'resented ,y a demand curve ... Bowever when the
mono'olist is faced with a mono'olist he is no longer concerned with an aggregate
res'onse to his decisions ... the mono'olist faces another decision ma9er. =e have
arrived at the old economic 'ro,lem of the theory of ,ilateral mono'oly or Hisolated
exchange.H (8oddington #$&3:1).
The 'ro,lem when one actor faces another actor rather than the statistical regulari*
ties of the mar9et descri,a,ly in demand curves is that the exchange is indetermi*
As +en has 'ointed out it is not the outcome which is indeterminate ,ut the (economic)
theory ... The existence of indeterminacy seems to im'ly that we cannot achieve a 'ro'er
understanding (of exchange among interde'endent actors) without introducing further
conce'ts into the theoretical framewor9. (8oddington #$&3: ##).
The condition of isolated exchange or ,ilateral mono'oly under discussion here
is of course the elementary exchange relation re'resented a,ove as Ax: Gy. The
indeterminacy referred to is the ina,ility of economic theory to s'ecify the exchange
ratio x/yJ to 'redict who will get how muchJ to descri,e or ex'lain the 'rice that
resource x will have in terms of y. As 8oddington indicates further conce'ts must
,e introduced into the theory. The additional conce'ts introduced ,y him are
ex'ectations a,out other7s demands for a series of dates in the future and the testing
and revising of those ex'ectations as time (and seKuential actions) flow ,y.
Thus an economist attem'ting to deal with the social relation rather than the
actor*mar9et relation is forced to introduce the most essential feature of social
exchange relations as conceived a,ove: their develo'mental or longitudinal charac*
ter. The ex'ectations that 8oddington conceives are similar to Thi,aut & Felley7s
Hcom'arison levelH although the two conce'ts are used in Kuite different ways.
Thus social exchange theory focusing u'on exchange relations 'ic9s u' 'recisely
where traditional com'etitive economic theory seems to flounder. @s the 'ro,lem of
indeterminacy encountered in the economics of ,ilateral mono'oly and oligo'oly
solva,le within social exchange theory:
#he E&change Ratio &7y
=ithout dou,t the most central to'ic of research in social exchange theory to date
has ,een the determination of the (economically indeterminate) exchange ratio &78.
@t corres'onds to 'rice determination in economics.
Gefore discussing determinants of x/y directly we should recall that we are discuss*
ing a continuing series of transactions ,etween the same 'arties. -nli9e the ahistoric
encounter in economic theory when two 'ersons interact over a 'eriod of time*
or ex'ect to*the exchange relation can ta9e on what Glau might call HemergentH
or sim'ly develo'mental attri,utes. >or exam'le attitudes of inter'ersonal attrac*
tion will form ,etween 'ersons who re'eatedly engage in mutually rewarding ex*
change (Gyrne & Rhamey #$&) .ott & .ott #$&$) adding a whole new dimension
to the relationshi'*one that li9ely affects the ,argaining 'rocess that results in &78.
Dermain to this 'oint Mee9er (#$%#) and 8oo9 (#$%)a) have se'arately devel*
o'ed an a''roach to decision ma9ing in social exchange relations that is es'ecially
worthy of note. @n any situation in which actions will affect the distri,ution of
rewards a 'erson may em'loy anyone of a variety of exchange rules. An exchange
rule or a distri,ution rule is a normative definition of the situation that forms among
or is ado'ted ,y the 'artici'ants in an exchange relation. @t is among the emergent
S68@A. EA8BACDE TBE6R4 ()(
attri,utes of exchange relations. >or exam'le Hrationality is an exchange rule that
assigns to + the outcome that maximi<es his total 'ayoff.H or again ... HDrou'*gain
is an exchange rule that assigns the maximum value to the sum of +7s and 67s total
'ay*offs.H (This corres'onds to +arsons7s Hcollectivity orientation.H) 6ther ex*
change rules discussed ,y Mee9er are altruism com'etition reci'rocity and status
consistency. The latter two have features in common with eKuity and distri,utive
0ustice. Ber list is not meant to ,e final or exhaustive.
@n my o'inion through the general idea of an exchange rule Mee9er has made
a real contri,ution to social exchange theory. =hether or not 'eo'le are rational
needs no longer ham'er our discussions. Rather rationality (and altruism and eK*
uity) are seen as orientations 'eo'le sometimes ta9e de'ending u'on the social
relation they have with each other. She has ,rought the time*honored notion of the
definition of the situation into the framewor9 of exchange theory. @n doing so an
im'ortant line of research is o'ened u': what are the factors that generate s'ecific
exchange rules as normative attri,utes of exchange relations:
The single most heavily researched to'ics in this field*eKuity and distri,utive
0ustice*are the two that ,ear most directly u'on x/y. The research is far too
extensive to 'ermit a review or a summary here. Bowever @ thin9 it well to assert
that eKuity should ,e viewed at least tentatively as one exchange rule among others
as 8oo9 has suggested.
SAB.@CS 6C TBE HE@+.6MA84H 6> TRAEE 6ne might o,0ect to the a,ove
discussion. Eoes not Mee9er7s exchange rule or 8oo97s distri,ution rule change the
whole 'ro,lem of economic determinacy: If an eKuity rule is o'erating ,etween A
and G then A is not trying to maximi<e y as was assumed in the economic 'ro,lem
of ,ilateral mono'oly.
True we are dealing with a different game ,ut the difference is little more than
the longitudinal as'ect of exchange relations versus the cross*sectional game of a
single mar9et transaction. Short*run versus long*run gains se'arate the two.
@nteresting wor9 ,y Sahlins (#$&)) illuminates the 'oint dee'ening our under*
standing of distri,ution rules as develo'mental normative attri,utes of social ex*
change relations. Bis first 'oint (#$&):$&) concerns ethnogra'hic o,servations of
... most exchanges*whether as gift*giving mutual aid sale ,arter coercive 'resents
or whatever*do not ta9e 'lace at uniform rates. There is a wide indeterminacyJ similar
goods move against each other at different ratios in different transactions. This indeter*
minacy of rates is the characteristic fact of 'rimitive exchange.
Since most of these transactions ta9e 'lace in grossly im'erfect mar9ets Sahlins
o,serves that such variation might reflect the indeterminacy mentioned a,ove*the
indeterminant outcome of ,argaining.
-nfortunately however ,argaining is too marginal an exchange strategy among 'rimitive
'eo'les to ,ear the ex'lanation of rate variations. @t is un9nown to most of them. Among
societies that do 'ractice it haggling is ty'ically a marginal transaction restricted to
inter*community deals ,etween com'arative strangers and considered disre'uta,le in the
inner social s'heres where exchange is most intense.
Se'arating in*grou' exchange from external trade Sahlins sees two clear ,ut
different 'atterns descri,a,le as one of 8oo97s distri,ution rules. The rule o'erative
,etween 'ersons close in 9inshi' and residential distance is called reci'rocity in
economic anthro'ology. @t is in that s'here where exchange rates vary widely under
the rule Hto each according to need from each according to ca'acity.H
Meanwhile in external trade transactions under a distri,ution rule of eKuality are
o'erative. Each transaction is one of a series ,etween mem,ers of a trade friendshi'
or 'artnershi'. -nder such conditions (descri,ed more fully ,y Sahlins) each
transaction must 'reserve the solidarity ,uilt ,y 'revious transactions and 're'are
the ground for future transactions. As a result strictly economic relations develo'
an ethic and a di'lomacy as 'art of a ,argaining 'rocess. Thus
The economic ratio is a di'lomatic maneuver. "It reKuires a good deal of tact on the 'art
of everyone concernedH as Radcliffe*Grown wrote of Andamanese inter,and exchange
Hto avoid the un'leasantness that may arise if a man thin9s that he has not received things
as valua,le as he has given ... H (#$13:1") The 'eo'le must literally come to terms. The
rate of exchange ta9es on functions of a 'eace treaty.
Cot to say that intergrou' exchange sim'ly serves the Hmoral 'ur'oseH of ma9ing
friends. Gut whatever the intent and however utilitarian it will not do to ma9e enemies.
*As it turns out the safe and sane 'rocedure is not 0ust measure for measure*exactly
,alanced reci'rocity. The most tactful strategy is economic good measure a ,a9er7s
do<en of which there can ,e no com'laints. The tendency ,ecomes over+reciprocation
('. #21).
There emerges in longitidinal relations*if the 'arties en0oy a ,alance of 'ower
**eKuity and even a touch of altruism as exchange rules. >or ex'erimental studies
on a similar 'oint see Ger9owit< I Eaniels (#$&1) and 5ones (#$&$).
F-BC +EC ACE EMERS6C 6C +6=ER =ithin economics 'ro'er much dis*
cussion of indeterminacy in the x/y ratio concludes that it is a 'ro,lem of 'ower.
Fuhn (#$&() formulated a clear and very general conce'tion of ,argaining 'ower
in the A*G relation showing further that his formulation is similar to my own theory
of 'ower*de'endence relations and similar also to other formulations in economics.
Some time earlier +en (#$)$: ##") writing on la,or*management negotiation (which
he sees as a 'ro,lem in ,ilateral mono'oly when la,or is organi<ed) was also moved
to formulate the 'ro,lem as a 'ower 'rocess:
Cow the sacrifice which G ma9es ,y retaining the good is o,viously nothing more than
the de'endence of G on A. Therefore economic 'ower is ,ased on the extent to which
the su,0ect to ,e overcome is de'endent on the H'owerfulH su,0ect and on the extent to
which the H'owerfulH su,0ect is inde'endent of the su,0ect to ,e overcome.
Gargaining 'ower li9e social 'ower in general is the 'otential to influence others7
action (e.g. yield more y or acce't less x 'er unit of y). Gut again our concern is
the series of transactions that com'rise an ongoing social relation. 6ur hy'othesis
would ,e: @f the relation is un,alanced in 'ower to A7s advantage then x/y will
decrease across continuing transactions until either 'ower is ,alanced or x/y has
decreased to the su,sistence level for G. (Gy the su,sistence level @ mean the 'oint
S68@A. EA8BACDE TBE6R4 ())
at which G de'arts from the relation whether ,y migration starvation or loss of
ca'acity to 'roduce more y.) The rationale for this hy'othesis includes two 'oints:
(a) changes in x/y after relative de'endency (and 'ower) in a 'redicta,le wayJ and
(b) if A has the 'ower to reduce x/y ,ut does not do so he will derive less reward
and/or more cost from the A*G relation than will G. Therefore eKuity and distri,u*
tive 0ustice do not stand in o''osition to 'ower use or ex'loitation. As a result
self*righteous moral 0ustifications for the use of social 'ower are easily fashioned*
the Hwhite man7s ,urdenH and similar rationales.
@n an ethnogra'hic context E'stein (#$&%) gives us a fine analysis of the famous
5a0mani village system of @ndia showing how it ha''ens that x/y (the 'ro'ortion
of agricultural yield turned ,ac9 to landowners ,y tenant farmers) evolved to a
near*su,sistence level for tenant farmers. >or an ex'erimental study of a similar
'rocess see Stolte & Emerson (#$%&).
STRATED@8 @CTERA8T@6C >inally there is a large and rather scattered ,ody of
theory and research that deals in one way or another with the social interactive
'rocess relating to the x/y ratio. =here the a,ove to'ics deal more with attri,utes
of exchange relations**decision rules 'ower*de'endence etc*this wor9 deals with
internal interactive 'rocesses. =e can list ,ut a few: com'liance*gaining techniKues
(Gandura #$&$ Marwell & Schmitt #$&) Schmitt #$&1 Schmitt & Marwell #$&$)
altercasting (=einstein #$&) #$&& #$&$J =einstein Gec9house Glumstein & Stein
#$&3J =einstein & Eeutsch,erger #$&(J =einstein & =iley #$&$)J ingratiation
(5ones #$&1 #$&)J 5ones Dergen Dum'ert & Thi,aut #$&)J 5ones Dergen & 5ones
#$&( Eavis #$&)J 5ones Stires Schaver & Barris #$&3 Stires & 5ones #$&$)J
self*'resentation and im'ression management (Doffman #$%2J Dergen & Taylor
#$&$J Garth #$&&).
>inally a to'ic of es'ecially high interest concerns the emergence of norms and
contracts from the ,argaining 'rocess. It entails the transition from strategic in*
teraction to normatively regulated exchange. See Thi,aut & Felley (#$)$) on social
norms along with Thi,aut & >aucheux (#$&))J Thi,aut (#$&3)J Thi,aut & Druder
(#$&$)J Murdoc9 (#$&%)J Murdoc9 & Rosen (#$%2)J and Michener Driffith &
+almer (#$%#).
6ur discussion of exchange theory dwelling as it has u'on 'sychological and utility
theory foundations has em'hasi<ed microsco'ic social analysis. @ndeed the litera*
ture identified with Thi,aut & Felley Bomans and Glau is almost exclusively the
social 'sychological analysis of elementary social 'rocesses. Bowever des'ite this
recent concentration at the micro level social exchange theory has origins in and
is now returning to the macro level of societal analysis. Ellis (#$%#) in his recent
examination of the Bo,,esian 'ro,lem of order refers to exchange theory as an
a''roach on the same level with structural*functionalism and conflict theory. Simi*
larly 8lar9 (#$%") discusses functionalism and exchange theory as 'arallel*and
com'lementary*a''roaches to macro level social analysis. 8oleman7s wor9 (#$%"
#$%() 'uts forth a macro*level form of exchange and 'ower analysis as does Gurt
(#$%&). 8oo9 (#$%),) has ,egun an exchange a''roach to interorgani<ational re*
The ga' ,etween Boman7s elementary 'rocesses and say .ens9i7s (#$&&) descri'*
tion of 'ower and resource distri,ution in total societies cannot ,e ,ridged in a single
s'an. Even so the ste'*,y*ste' extension of exchange theory to more macrosco'ic
levels is clearly the most im'ortant line of continued theory construction.
4Elementary4 Social Behavior
The transition from micro to macro theory must ,egin with an ex'licit recognition
of features distinguishing the two levels. There a''ear to ,e three. >irst Bomans7s
HelementaryH social ,ehavior is su,institutional in that it*the ,ehavior.......Psiesen
as governed ,y the 'references of individuals as distinct from the 'rescri'tions
or mandates of envelo'ing social grou's or social structural forms. (See Ceedham
#$&" for an analysis of micro versus macro exchange of women in terms of
'reference versus 'rescri'tion.) @f an individual7s actions in an exchange 'rocess are
institution* ally reKuired one might as9 how reward/cost analysis can inform us
a,out the 'rocessJ yet if valued resources are exchanged through 'rescri,ed
,ehavior some* thing resem,ling reward is surely involved.
The a,ove 'ro,lem*exchange through 'rescri,ed ,ehavior*might come down
to the Kuestion of who is rewarded. This leads to the second feature of elementary
exchange: the actor involved is usually treated as an autonomous individual as
distinct from cor'orate grou's and from social 'ersons (i.e. role occu'ants). =hen
a woman is exchanged for goods in the institution of marriage local lineages as
cor'orate grou's are the actors involved (.each #$)#). Those collective actors
reali<e rewards and ex'end 'ooled resources through negotiations carried out ,y
role*'laying agents of the grou'. Thus in some measure we already have conce'ts
availa,le to us (in role theory) to deal with 'rescri,ed exchange and collective
It is the third feature of micro exchange theory that is most trou,lesome: it is
dyadic. =hile the elementary social 'rocesses under study ,y Bomans are not
necessarily dyadic the theory**the conce'ts and 'ro'osition introduced*move us
to the analysis of two*'arty transactions. The same is true of Glau7s (#$&1a) ma0or
contri,ution. =hile o,viously concerned with the analysis of exchange among
'otentially large num,ers of 'eo'le the ,asic conce'ts he em'loys including those
drawn from economics (e.g. indifference curves) incline one to reduce the social
situation to a set of dyadic transactions. Economic theory offers aggregated analysis
of such a set of socially se'arate two*'arty transactions.
8learly social exchange theory needs a set of conce'ts and 'rinci'les that de*
scri,e the lin9age of exchange relations into larger social structures*structures that
will do for social exchange theory something similar to what the com'etitive mar9et
does for economic exchange theory.
!rom 2- to 9+$arty E&change Corporate %roups
and E&change 9etwor6s
@ have suggested elsewhere (Emerson #$&$ #$%",) that two very different yet
com'lementary distinctions hel' to extend systematic analysis from exchange in
S68@A. EA8BACDE TBE6R4 ()%
dyads to larger social structures. 6ne of these is 'roductive exchange useful in
discussing grou' 'ro,lem solving the division of la,or (Emerson #$&3) and cor'o*
rate grou's. The other is the conce't of connections among exchange relations
leading to the analysis of exchange networ9 structures.
DR6-+ +R68ESS AS H+R6E-8T@!EH EA8BACDE The economist Fuhn (#$&()
has made the claim that most organi<ed social grou's ,oth small and large*e.g.
families ,usiness cor'orations committees legislative ,odies etc*are ,ased u'on
the single generic 'rocess that in economics is called 'roduction. To examine the
character of this 'rocess Fuhn7s own exam'le is worth re'eating:
Su''ose that 'erson A has ,read as resource A and 'erson G has cheese as
resource Y. .et ,oth A and G value Q where Q is a cheese sandwich. -nder these
conditions exchanges of x for y will occur in a ty'ical exchange relation Ax:Gy.
After the exchange ,oth A and G might fashion and eat their res'ective sandwiches.
8all this familiar 'rocess sim'le exchange to distinguish it from the following
'roductive exchange. @nstead of exchanging # x for " y and se'arately ma9ing
sandwiches A and G might 0ointly manufacture Q sandwiches and then divide u'
the 'roduct Q. Some "Z" can only ,e collectively 'roduced. >or exam'le in village
@ndia 'rior to the introduction of modern agricultural technology grain could ,e
'roduced most effectively ,y a total village community including several classes of
cultivators and several categories of artisans all coo'erating in an exchange system
9nown as the :agmani system. The village o'erated as a cor'orate grou' its mem*
,ers ,ound together in a s'ecial form of exchange.
That ty'e of exchange can ,e called 'roductive exchange. -nli9e the direct
transfer of valued items in sim'le exchange here items of value are 'roduced
through a value*adding social 'rocess. @n general the se'arate resources of two or
more 'ersons A G 8 ... C are com,ined through a social 'rocess involving a
division of la,or. The result is a valued 'roduct that might ,e divisi,le (li9e grain)
among all 'roducers or that might ,e converted through sim'le exchange to a
divisi,le medium (money) and distri,uted among mem,ers ,y some distri,ution
rule (see 8oo9 a,ove.)
EA8BACDE CET=6RFS The idea of 'roductive exchange readily accommodates
large num,ers of actors there,y freeing exchange theory from its dyadic format.
Bowever 'roductive exchange is uniKuely addressed to resource distri,ution within
cor'orate grou's. Such grou's can ,e 'ro'erly viewed as HactorsH in sim'le ex*
change 'rocesses. Exam'les are .each7s local lineage grou's in the exchange of
women cor'orate villages in the land revenue system of the Mughal em'ire (Emer*
son #$%&) etc. Therefore it is essential in macro exchange theory that sim'le
exchange also ,e analy<ed ,eyond the dyad.
Thus we come to the notion of exchange networ9s involving three or more actorsJ
structured exchange systems that are not to ,e confused with grou's. Cetwor9s tie
together ,oth grou's and individuals as actors. Some of the earliest social exchange
theory dealt with such networ9s*Malinows9i (#$"") and others since on the HFula
ringHJ .evi*Strauss (#$&$) and others on matrilateral cross*cousin marriage in Hcir*
These two exam'les of networ9 structure are worth descri,ing. The Fula is an
intertri,al exchange of nec9laces for armlets ,etween communities inha,iting a ring
of islands. If one 'arty does not give to another what the other has given to him
*li9e not returning a 8hristmas gift to its sender one year laterJ and if the item is
not 'erisha,le or consuma,le then it follows of necessity that: (a) the exchange
system will ,e HclosedH or cyclicJ and (b) one item will flow always in one direction
counter to the direction of another item. So it is with the Fula Hring.H
Similarly in matrilateral cross*cousin marriage a lineage cannot receive women
from a lineage it gives women to. The origins or functions of this marriage rule have
,een hotly de,ated*in a de,ate of great relevance to our interest in micro versus
macro theory (see Ceedham #$&"J Bomans & Schneider #$)) E9eh #$%1). Gut
whatever its origin some of its structural im'lications are clear: marriage networ9s
will form circles with women flowing in one direction. (As an exchange item
women cannot ,e HconsumedH ,ecause of incest and exogamy rules.) Gut what other
item flows against women: Ceed there ,e one:
E9eh (#$%1) would li9e to ,elieve that social exchange is not grossly utilitarian
and therefore that gifts (nec9laces women etc) that flow in a circle need not*
indeed should not*have o,0ects of material worth flowing the other way. @n fact
he would 'refer that nothing flow the other way ,ecause if it does the favored
generali<ed exchange of the extended networ9 might dissolve into the restricted
exchange of two*'arty mutual reward with a loss of grou' solidarity and other*
directed morality.
@n fact however such networ9s tend to ,e com'osed of lin9ed two*way exchange
relations. 6,0ects of great material value are often exchanged for wives ,oth items
flowing around the circle. The im'ortant studies in alliance theory do not de'end
u'on non utilitarian exchange and they do involve the exchange of honor status
and 'ower (.each #$)#).
=ith such networ9s as the a,ove to illustrate the idea the general to'ic of
networ9 forms and structures stands o'en as a most fruitful line of research.
A lot
of research on exchange networ9s is now going on. @n the la,oratory Stolte &
Emerson (#$%&) have shown 'ower to ,e a function of 'osition in networ9 structures
S>ar more common than the rings and cycles descri,ed a,ove are centrali<ed tree structures.
>or exam'le Sahlins (#$&() descri,es the ty'ical H,ig manH 'attern in anthro'ology as a
networ9 for the 'ooling and redistri,ution of resources. Garth7s (#$)$a) study of 'olitical
leadershi' in Swat could ,e analy<ed as such a structure.
Sahlins7s notion can ,e viewed as a centrally organi<ed system of what ethologists study
under the la,el of Hreci'rocal altruismH in lower animal s'ecies. A gives hel'* to G when G
is in need and at cost to A. If and when A needs hel' and 8 E ... C is around one will
'rovide it*again with no assurance of return. Bowever the genetic line common to A
through C is given a survival advantage through such Hreci'rocal altruism.H
@n Sahlins7s discussion reci'rocity as a human exchange system functions the same way
,ut it occurs only among 'ersons with close 9inshi' distance. It might ,e a ,ac9u' or regulated
,y 9in grou' authority structures. =hen the grou' is larger a centrally managed system of
taxation and relief may emerge as outlined in Sahlins7s 'ooling and redistri,uting networ9
S68@A. EA8BACDE TBE6R4 ()$
of various sha'es. Gurt (#$%&) gives us mathematical models of 'ower and 'osition
in community structure viewed as an exchange networ9. Be utili<es data 'rovided
,y .auman & +a''i (#$%&). Emerson (#$%"a) has suggested directions that su,stan*
tive exchange networ9 theory can ta9e in examining such to'ics as social class
stratification and division of la,or.
=aiting for such su,stantive theory to catch u' is a ,ody of availa,le mathematics
in the form of gra'h theory and networ9 theory.
86C8.-E@CD 86MMECT
HExchange theoryH is not to ,e ta9en as a theory. Rather it is a frame of reference
that ta9es the movement of valued things (resources) through social 'rocess as its
focus. As @ see it its sco'e is defined ,y an assum'tion: that a resource will continue
to flow only if there is a valued return contingent u'on it. +sychologists call this
contingent return rein;orcement+economists sim'ly call this reci'rocally contin*
gent flow e&change.
@n reviewing the recent literature on social exchange one finds conce'tual confu*
sion and de,ate concerning issues of tautology rationality in social ,ehavior and
reductionism in the strategy of ex'lanation. This confusion has @ ,elieve seriously
retarded em'irical research. The confusion stems again in my o'inion from the use
in sociology of conce'ts ,orn in the analysis of individual actions and decisions. @
recommend that longitudinal social relations**exchange relations in this case*,e
consciously em'loyed as the unit of analysis.
=ith such a unit it is then 'ossi,le to deal develo'mentally with structures of
continuing interaction ,etween 'arties****cor'orate grou's and their role*occu'ying
mem,ersJ and networ9s involving many actors ,oth cor'orate grou's and individu*
als. It is 'recisely social structures of this sort that violate the assum'tions of
neoclassical economics (e.g. Hvertical organi<ationH and oligo'oly in the oil indus*
try). Thus @ li9e to thin9 of social exchange theory as develo'ing the conce'tual
tools needed (longitudinal exchange relations and networ9 structures) to deal with
exactly those to'ics that economics theory has trou,le with: mar9et im'erfections.
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