Social Exchange Theory, developed by Peter Blau in the 1960s, is a sociological perspective that explains social interactions and relationships in terms of a cost-benefit analysis. According to this theory, individuals engage in relationships with others based on the rewards and costs they perceive from those relationships.

Key Concepts

At the core of Social Exchange Theory are three key concepts: rewards, costs, and outcomes. Rewards refer to the positive experiences or benefits individuals receive from a relationship, such as companionship, support, or material resources. Costs, on the other hand, are the negative experiences or sacrifices individuals make in a relationship, such as time, effort, or emotional stress.

The outcome of a social exchange can be calculated by subtracting the costs from the rewards. If the outcome is positive (rewards outweighing costs), individuals are more likely to continue and invest in that relationship. Conversely, if the outcome is negative (costs outweighing rewards), individuals may be inclined to terminate or avoid that relationship.

Comparison Levels

Another important aspect of Social Exchange Theory is the concept of comparison levels. Comparison levels are standards against which individuals evaluate their current relationships. These standards are influenced by past experiences and societal norms.

If an individual’s current relationship meets or exceeds their comparison level for alternatives (the perceived value of available alternatives), they are more likely to stay in that relationship. However, if their current relationship falls below their comparison level for alternatives, they may consider leaving and seeking better alternatives.

Equity Theory

Social Exchange Theory also intersects with Equity Theory, which focuses on perceptions of fairness in relationships. Equity Theory suggests that individuals strive for a balance between what they contribute to a relationship and what they receive from it.

If individuals perceive a fair balance between their inputs (contributions to the relationship) and outcomes (rewards received), they are likely to be satisfied and committed to that relationship. However, if they feel their inputs outweigh their outcomes or vice versa, feelings of inequity can arise, leading to dissatisfaction and potential relationship strain.


Social Exchange Theory has been applied in various fields, including psychology, sociology, and organizational behavior. In psychology, it helps explain how individuals make decisions about forming and maintaining relationships.

In sociology, Social Exchange Theory provides insights into social interactions within groups and societies. It helps understand how individuals negotiate and exchange resources within social networks.

In organizational behavior, this theory has been used to analyze employee-employer relationships. It helps understand why employees choose to stay or leave organizations based on the perceived rewards and costs associated with their jobs.


Social Exchange Theory by Peter Blau offers a valuable framework for understanding interpersonal relationships. By considering the rewards, costs, outcomes, comparison levels, and equity perceptions in social exchanges, this theory sheds light on why individuals engage in certain relationships while avoiding others. Its applications in various fields highlight its significance in explaining human behavior within different social contexts.