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Social Exchange Theory

Social Exchange Theory. Presented by: Seyedreza Mousavi February 2012. Rational Choice Theory. Rational decision making entails choosing an action given one's preferences, the actions one could take, and expectations about the outcomes of those actions. Reward. Action. Utility. Cost.

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Social Exchange Theory

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  1. Social Exchange Theory Presented by: Seyedreza Mousavi February 2012

  2. Rational Choice Theory • Rational decision making entails choosing an action given one's preferences, the actions one could take, and expectations about the outcomes of those actions. Reward Action Utility Cost

  3. Preferences • Strict Preference • Weak preference • Indifference

  4. Assumptions of RCT • Rationality (more is better than less) • All the costs are external • Completeness • Transitivity • Perfect information • An individual has the cognitive ability and time to weigh every choice against every other choice.

  5. Operant Conditioning • Reinforcement • Positive reinforcement • Negative reinforcement • Punishment • Positive punishment • Negative punishment • Extinction • Satiation

  6. George C. Homans Social Exchange Theory

  7. Key Concepts • Resources • Money, love, status, information, good, and service • Rewards • Received resources • Costs • Spent resources • Value • Value = Rewards – Costs

  8. Key Concepts • Principle of Satiation • Loosing value due to increased availability • Principle of Deprivation • Increasing value due to decreased availability

  9. Key Concepts • Comparison Level (CL) • Societal norms, past experiences, observations • Satisfaction = Value - CL

  10. Key Concepts • Comparison Level of Alternatives • Evolving Subjective Individual Standard

  11. Propositions • Value> CL > Clalt = Satisfying and stable • Value> CLalt > CL = Satisfying and stable • CLalt > CL > Value= Unsatisfying and unstable • CLalt > Value> CL = Satisfying and unstable • CL > CLalt > Value= Unsatisfying and unstable • CL > Value> Clalt = Unsatisfying and stable

  12. SET Principals • Reciprocity • The concept of interdependence • Power • Greatest Resources • Control over punishment and reward • Least Interested • Distributive Justice • Equity • Both individuals derive similar levels of rewards • Trust

  13. SET Principals • Commitment • Social and Intimate Exchanges • Normative Orientations • Societal/ Cultural views on appropriateness of behavior in relationships

  14. Assumptions • Individuals seek rewards and avoid punishments. • Rationality assumption of rational choice theory holds the idea that parties “calculate the best possible means to compete in rewarding situations.” • Information access • Parties involved in the interaction are goal-oriented. • Individuals’ standards used to evaluate the value can differ from person to person and can change over time. • Repetition of the exchanges creates patterns of social interactions that develop social structures and lead to power differentiations.

  15. Criticisms • Assumes humans act rationally when deciding on an exchange • Some issues are difficult to explain effectively utilizing exchange theory such as altruism • Limited to dyadicrelationships

  16. Individualistic VS. Collectivistic Two approaches toward SET

  17. Individualistic • Homans and Emerson • The relational aspect is individualistic

  18. Collectivistic • Malinowski, Levi-Strauss, and Ekeh • The relational aspect is collectivistic

  19. IS Relevance • Complex IT adoption • IT Outsourcing

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