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
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
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
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
Exchange Theory 3
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
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
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
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
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
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
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,
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
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
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
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
Critique
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
References
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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,
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Publications.
Nye, I. F. (1979), Choice, exchange, and the family. In W. R. Burr, R. Hill, I. F. Nye, &
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