EXCHANGE THEORY

Peter.M.Blau
Social exchange theory
■ The social exchange theory is introduced in 1958 by George C Homans .
■ Main purpose of the theory is to maximize benefits and minimize cost
■ Social exchange theory is a model for interpreting society as a series of
interactions between people that are based on estimate of rewards and
punishments.
■ According to this view, our interaction are determined by the rewards or
punishments that we expect to receive from others which we evaluate using a cost
benefit analysis model whether consciously or subconsciously
■ Exchange theory is not pure sociological theory, it is a behavioural theory, which is
related to psychology .
■ The theory has rooted in economics, psychology, sociology.
■ Many psychologists consider the social exchange theory as highly individualistic
• In sociology social exchange theory is the major sociological perspective
• It is a two sided process involving two action , One to give and other is to
receive something in return.
• According to Homans social structure emerged from elementary forms of
behaviour
• Homans developed 5 key proposition to assist in individuals behaviour based
on rewards and punishments.

HOMANS PROPOSITIONS

• Success proposition
• Stimulus proposition
• Deprivation – satiation proposition
• Aggression –approval proposition
• Proposition of rationality proposition
• Peter .Michael. Blau
• Born: 1918 Austria
• Died: 2002 USA
• American sociologist, Theorist
• Famous work: Social exchange theory
and structural sociology
Basic assumptions of social exchange
theory
■ People who are involved in the interaction are rationally seeking to
maximize their profits
■ Most gratification among humans comes from others
■ People have access to information about social economical and
psychological aspects of their interactions
■ People are goal oriented in a freely competitive system
■ The exchange operates within cultural norms
■ Peter blau focused his early writing on social exchange theory more
towards the economic and utilitarian perspective, where as Homans
focused on reinforcement principle
■ Blau’s utilitarian focus encouraged the theories to look forward as in
what they anticipated the reward would be in regards to their social
interaction
■ Blau felt that it individuals focuses too much on the psychological
concepts within the theory, they would retain from learning the
developing aspects of social exchange.
■ Blau argued that interaction is shaped by a reciprocal exchange of
rewards both tangible and intangible.
Blau’s implicit principles
1. Rationality principle
2. Principles of reciprocity
3. Justice principle
4. Marginal utility principle
5. Imbalance principle
Blau’s main focus on
■ Love
■ Power
■ Wealth
Rationality principle
■ People act with reason
■ They choose what benefits them most
■ Actions are based on thinking and logic
■ Example: Studying to get good marks
(Doing what makes sense)
The rationality principle means that people make decisions based on logic and reason to get the
best results. They weigh the benefits and costs before choosing what to do. It is about choosing
the most useful or profitable option.
Example:
If a student has to choose between playing a game or studying for an exam, the rational choice is
to study, because it helps them get good marks. This decision is based on future benefits, not
just short-time fun.
So, rationality means acting in a smart way to reach your goals.
Principles of reciprocity
1. Give and Take
(People return favour's and kindness.)
2. Balance in Relationships
(Fair exchange builds strong bonds)
3. Moral Duty to Return
(We feel we should give back when helped.)
4. Delayed Return Possible
(The return may come later, not right away.)
5. Creates Trust and Cooperation
(Reciprocity helps people work together.)
The principle of reciprocity means giving something in return when someone
gives you something. It is the idea of “give and take” in social life. People feel
the need to return a favour, help, or gift they receive.
Example:
If your friend helps you with homework today, you may feel like helping them
later. That is reciprocity – returning help for help.
This principle builds trust and cooperation in relationships and society.
Justice principle
1. Fairness in Treatment
Everyone should be treated equally and fairly.
2. Equal Rewards for Equal Work
People who do the same work should get the same reward.
3. No Discrimination
No one should be treated badly because of who they are.
4. Right and Wrong
Actions should be judged by fairness and honesty.
5. Builds Trust in Society
Fair rules help people live and work together peacefully.
The justice principle means that people expect to be treated fairly. Everyone
wants rewards or outcomes to be equal to their efforts. If someone works hard,
they should get more; if they do less, they should get less.
Example:
If two students work on a group project, but only one does all the work, giving
both the same marks would feel unfair. The student who worked more expects
more credit — this is justice.
This principle helps keep balance and fairness in society.
Marginal utility principle
The marginal utility principle means that the value or satisfaction we get from
something decreases as we get more and more of it.
Example:
If you are very hungry, the first chapatti gives you a lot of satisfaction. The
second gives less, and by the fourth or fifth, you may not enjoy it at all.
So, the more you get, the less useful each extra unit becomes. That’s called
diminishing marginal utility.
This principle helps explain why people stop buying or wanting more of the
same thing.
Imbalance Principle
1. Unequal Give and Take
One person gives more, the other gives less.
2. Creates Tension
People feel unhappy or used when things are not fair.
3. Affects Relationships
Imbalance can break trust and cause conflict.
4. Leads to Power Difference
The giver may gain control over the receiver.
5. Need for Balance
Healthy relationships need fair exchange.
The imbalance principle means that when there is no balance in give and take between
people, they feel uncomfortable or unhappy. People expect fair exchanges, and if that doesn’t
happen, it creates tension or a feeling of injustice.
Example:
If you always help your friend, but they never help you back, you may feel upset. This is an
imbalance in the relationship.
Imbalance leads people to either stop the exchange or try to make it fair again.
Cognitive dissonance
Cognitive Dissonance is a psychological concept that refers to the mental discomfort or
tension a person feels when they hold two or more contradictory beliefs, values, or
attitudes at the same time, or when their behavior conflicts with their beliefs.
Example:
A person who smokes cigarettes might also believe that smoking is harmful to health.
This causes dissonance because their action (smoking) and belief (it’s harmful) clash.
To reduce this discomfort, they may:
Change their belief: “It’s not that harmful.”
Justify their behaviour: “It helps me relax.”
Change their behaviour: Quit smoking.
Conclusion
Peter M Blau introduced a comprehensive theory which bridges the micro-macro gap.
He constructed a blend of exchange, functional and dialectical conflict theories. By
1970’s Blau moved away from social exchange theory and study of micro levels to
macro level structural theories which was later took over by Richard Emerson.
 Reference
■ The structure of sociological theory, Jonathan H Turner(1987)
THANKYOU

AMEERA P R
2ND YEAR MA SOCIOLOGY