Social Exchange Theory in Sociology: Understanding the Basics

Social Exchange Theory is a fundamental concept in Sociology that seeks to explain how individuals interact with each other and make decisions based on the perceived benefits and costs of those interactions. This theory has its roots in the study of economics, where it is commonly referred to as “rational choice” or “cost-benefit analysis.”

What is Social Exchange Theory?

Social Exchange Theory posits that people are motivated by self-interest and seek to maximize their rewards while minimizing their costs. In other words, individuals engage in social interactions when they believe that doing so will result in personal gain or benefit. Social exchanges can take many forms, including friendships, romantic relationships, professional partnerships, and even simple conversations.

The Basic Elements of Social Exchange Theory

At its core, Social Exchange Theory consists of three main elements: rewards, costs, and alternatives. Rewards refer to the positive outcomes individuals hope to achieve through an interaction or relationship with another person.

Costs are negative outcomes that might result from engaging in an interaction or relationship. Alternatives refer to possible alternative interactions or relationships that might be more rewarding or less costly than the current interaction.


Rewards can take many forms and are often subjective. Some common examples of rewards include love, friendship, respect, admiration, money, power, status, knowledge and social support. People engage in social exchanges because they believe that doing so will result in some form of personal reward.


Costs can also take many forms and are often subjective as well. Some common examples of costs include time spent engaging in an interaction or relationship (opportunity cost), emotional stress or strain (e.g., anxiety), financial expenses (e., buying gifts), loss of freedom (e., being obligated to spend time with someone) and loss of privacy.


Alternatives refer to other interactions or relationships that might be more rewarding or less costly than the current interaction. For example, if someone is unhappy in a romantic relationship, they might consider alternative relationships that offer more rewards and fewer costs. Alternatives can also be non-social alternatives, like engaging in a hobby or pursuing a career.

The Role of Expectations

Expectations play an essential role in Social Exchange Theory. People engage in social interactions because they believe that doing so will lead to positive outcomes (rewards) and avoid negative outcomes (costs). If expectations are not met, individuals may choose to disengage from an interaction or relationship.

The Importance of Equity

Equity is another concept that is essential to Social Exchange Theory. Equity refers to the perceived fairness of an interaction or relationship. If one person perceives that they are contributing more than they are receiving (i.e., inequity), they may feel dissatisfied and choose to disengage from the interaction or relationship.

In conclusion, Social Exchange Theory provides a framework for understanding how individuals make decisions about social interactions and relationships based on perceived rewards, costs, and alternatives. By considering these factors, we can gain insight into why people engage in certain interactions while avoiding others. Understanding these concepts can help us build more rewarding and satisfying relationships with others by ensuring that we are maximizing our rewards while minimizing our costs.