What Is Social Exchange Theory?

How social exchange theory influences relationships

social exchange theory involves costs versus benefits
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Social exchange theory proposes that social behavior is the result of an exchange process. The purpose of this exchange is to maximize benefits and minimize costs. According to this theory, people weigh the potential benefits and risks of social relationships. When the risks outweigh the rewards, people will terminate or abandon that relationship.

How Does Social Exchange Theory Work?

Most relationships are made up of a certain amount of give-and-take, but this does not mean that they are always equal.

Social exchange suggests that it is the valuing of the benefits and costs of each relationship that determine whether or not we choose to continue a social association.

Costs Versus Benefits in the Social Exchange Process?

Costs involve things that are seen as negatives to the individual such as having to put money, time, and effort into a relationship. For example, if you have a friend that always has to borrow money from you, then this would be seen as a high cost.

The benefits are things that the individual gets out of the relationship such as fun, friendship, companionship, and social support. Your friend might be a bit of a freeloader, but he brings a lot of fun and excitement into your life. As you are determining the value of the friendship, you might decide that the benefits outweigh the potential costs.  

Social exchange theory suggests that we essentially take the benefits and minus the costs in order to determine how much a relationship is worth.

Positive relationships are those in which the benefits outweigh the costs while negative relationships occur when the costs are greater than the benefits.

Expectations and Comparison Levels

Cost-benefits analysis plays a major role in the social exchange process, but so do expectations. As people weigh the benefits of a relationship against the costs of the relationship, they do so by establishing a comparison level that is often influenced by social expectations and past experiences.

If you have always had poor friendships, your comparison levels at the start of a relationship will be much lower than a person who has always a close-knit circle of supportive and caring friends.

For example, if your previous romantic partner showered you with displays of affection, your comparison level for you next relationship is going to be quite high when it comes to levels of affection. If your next romantic partner tends to be more reserved and less emotional, that person might not measure up to your high expectations.

Evaluating the Alternatives

Another aspect of the social exchange process involves looking at the possible alternatives. After analyzing the costs and benefits against and contrasting these against your comparison levels, you might start to look at the possible alternatives. The relationship might not measure up to your comparison levels, but as you survey the potential alternatives, you might determine that the relationship is still better than anything else that is available. As a result, you might go back and reassess the relationship in terms of what may be now a somewhat lower comparison level.

The Honeymoon Phase

The length of a friendship or romance can also play a role in the social exchange process.

During the early weeks or months of a relationship, often referred to as the 'honeymoon phase,' people are more likely to ignore the social exchange balance. Things that would normally be viewed as high costs are dismissed, ignored, or minimized while the potential benefits are often exaggerated.

So what happens when this honeymoon period finally comes to an end? In many cases, there will be a gradual evaluation of the exchange balance. Downsides will become more apparent and benefits will start to be seen more realistically. This recalibration of the exchange balance might also lead to the termination of the relationship if the balance is tipped too far toward the negative side.


Homans, G. C. Social Behavior, New York: Harcourt Brace and World; 1961.

Rusbult, C. A Longitudinal Test of the Investment Model: The Development (and Deterioration) of Satisfaction and Commitment in Heterosexual Involvements. Journal of Personality and Social Psychology. 1963; 45: 172-186.

Thibaut, J. W. and Kelley, H. H. The Social Psychology of Groups, New York: Wiley; 1959.

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