Social Exchange Theory (BB)

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The Theory at a Glance
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-social behavior often involves social exchanges where people are motivated to attain some valued reward for which they must forfeit something of value. -we seek profits in our exchanges such that rewards are greater than costs. -we are disturbed when there’s not equity in an exchange or when others are rewarded more for the same costs we incurred
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Visualization of Theory
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Exchange = Trade something of value (cost) for something need/valued (reward) Rewards – Costs = Positive Outcomes (profits) or Negative Outcomes (net loss) Inequity = Cost>Reward or My Costs>Your Costs or My Rewards<Your Rewards
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Elements of Social Exchange Theory
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-Value of Reward -Social Rewards -Costs -Profit -Equity and Distributive Justice
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Value of Reward
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\”a man emits a unit of activity, however that unit be defined, and this unit is either reinforced or punished by one or more units of activity he receives from another man or by something he receives from the non-human environment\” – how much the reward you’re receiving means to you -$5 may mean more to some people than it does to others -fluctuates over time: food is valuable when you’re hungry, but not once you’re already full
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Social Rewards
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when rewards can only be met through interaction with another person -being loved, respected, socially accepted, etc. -pleasure, satisfaction, gratification and fulfillment of needs
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Costs
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something of value that’s given up, withdrawal of a reward, or punishment -can be money, time, energy, work
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Profit
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Reward-Cost The greater the rewards & fewer costs, the greater the profit a person gains
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Equity and Distributive Justice
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trying to achieve a \”fair\” trade Equity: based on partners seeking a ratio of rewards and costs that are the same for both partners -Ex: if you’re putting more time and effort into a relationship than your partner you’ll attempt to create more balance/equity 1. Payback period in a relationship (if borrowed classmate $5 would expect to be paid back next day but would give best friend longer) 2. Assessment of the costs & rewards relative to our partners’ abilities to provide them or to the relative \”availability of resources\”
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Distributive Justice
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an outcome of an exchange where the two parties are rewarded proportionate to their costs aka the more you invest, the greater your return
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Social Behavior
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an exchange of goods, material goods but also non-material ones, such as the symbols of approval or prestige OR an exchange of activity, tangible or intangible, and more or less rewarding or costly, between at least two persons
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Social Exchanges
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voluntary actions of individuals that are motivated by the returns they are expected to bring and typically do in fact bring from others Intrinsic (love) Extrinsic (help with chores)
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Guiding Principles of Social Exchange Theory
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1. At the psychological level we use costs and rewards as part of our decision making process. Pros/cons 2. How we use economic principles to manage our interactions with other people – our social exchange. 3. At the relational level we apply economic principles in selecting and evaluating our relationships, weighing their rewards and costs as well as comparing those to alternatives
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Principle 1: Assessing the Costs and Rewards
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Social behavior can be explained in terms of costs, rewards, and exchanges
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Principle 2: Determining Profit
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People seek to maximize rewards and minimize costs in pursuit of the greatest profit
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Principle 3: Managing Interdependence
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Social Interaction involves two parties, each exchanging a reward needed by the other person
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Principle 4: Assessing, Comparing, and Predicting Relationship Rewards and Costs
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Social exchange theory can be used to explain the development and management of interpersonal relationships
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Outcome
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monitoring the rewards and costs we are getting at any given moment; aka current outcome/profit
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Comparison Level
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Evaluate the rewards and costs of relationship in terms of how they compare to what we expect or believe we deserve in such a relationship
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Comparison Level of Alternatives
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we compare the rewards & costs of other potential relationships to a given relationship
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Forecasted Rewards and Costs
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We assess the future of our relationships, evaluating the potential rewards and costs
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Cumulative Rewards and Costs
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the cumulative rewards and costs assessment represents the sum total of the rewards & costs (profits) a person receives over the history of the relationship.
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Principle 5:
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Social exchanges affect the relationships among members of the groups and organizations

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