Duane Swarts
ITT Technical Institute
Group Theory SP2750
Mrs. Meadowlark
4 February 2014
Social exchange theory suggests 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.
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.
The same applies to everyone when they are in a group setting. How we interact in a group setting be the same as the individual conversation or it can be completely different with a very wide range of reason down to and including the group around them.
1. People who are engaged in interaction are rationally seeking to maximize profits (Could this be a selfish view of human nature?).
2. Most gratification among humans is located in what?
3. Why is it better to understand such theories and how is it beneficial to companies?
4. People are rational and calculate the best possible means to compete in rewarding situations, why?
5. People are goal oriented in a freely competitive system, why?
Exchange operates within cultural norms, and social credit is preferable to social indebtedness. The language of Social Exchange theory betrays its assumption that we are all in it for ourselves. The basic formula for predicting the behavior for any properly socialized individual in any situation is: Behavior (Profits) = Rewards of interaction - Costs of Interaction. George Homans presented a concept of social behavior that was based on exchange. He introduced the notion that exchanges are not limited to material goods