In the Social Exchange Theory, which was initially introduced in 1959 by John Thibaut and Harold Kelley, an economic approach is applied to personal relationships of any and all kinds to determine the likelihood that individuals will remain in the relationship or choose to leave.
The theory states that individuals use a balance of the perceived costs and perceived benefits in a relationship to determine whether they will stay or leave (Miller, Perlman, & Brehm, 2006; Nakonezny & Denton, 2008). Essentially, if a person perceives that the benefits of a particular relationship outweigh the costs, then that person is likely to remain in the relationship. Likewise, if a person perceives that the costs outweigh the benefits, then that person is likely to leave the relationship.
The key word here is “Perception.” What one person may perceive as a cost or benefit may not be perceived the same way by another person. Also, it depends on what weight a person puts on any given cost or benefit. One cost could significantly outweigh another cost based on the perception of the individual. This means that there could be 5 benefits that a person perceives (i. e. attractive, funny, strong, financially independent, likes children), but one cost that can outweigh all 5 of those perceived benefits combined (for example, abusive).
But wait, there’s more! Not only are people more likely to leave a relationship when the costs outweigh the benefits they get out of it. Miller and colleagues (2006) report that when costs outweigh benefits, individuals are even more likely to leave the relationship when other, more attractive alternatives present themselves. This occurs when individuals believe the new relationship (or lack of a relationship altogether) will be more beneficial and rewarding than the current relationship (Miller et al., 2006).
Application in Your Relationships
Think about this in terms of friendships, romantic relationships, or even professional relationships and career. It is fairly simple to apply this theory to personal and romantic relationships, so I’ll use your career as an example.
We know that the benefits of your career probably include financial gain, an outlet to display your professional talents and skills, a social outlet to interact with others who likely have similar education, work experience, and interests as you do. Other benefits may include vacation time, health benefits, and a retirement plan.
Costs associated with your career might be work-life imbalance, work-related stress, poor job satisfaction, working with people you are not compatible with, heavy workload, poor leadership, insufficient pay or benefits, an so on. Sometimes the costs begin to add up and compound on each other to the point that they begin overshadowing the benefits you gain from your employment.
Now let’s say you receive another job offer in a related field that offers you more pay working fewer hours. This is an attractive alternative that seems to be more beneficial than your current job in more ways than one. Are you more likely to stay with the job you are unhappy with, or take the better paying job working fewer hours that will leave you more time for your personal life?
(From a business leader standpoint, this is something to think about when looking at turnover rates, employee morale, and the job satisfaction of your employees. How are you offsetting the costs of your employees with benefits or rewards to retain your valued staff?)
Set Your Goals
The Social Exchange Theory is just one aspect that can help you improve yourself to build more successful and fulfilling relationships. Contact me today to schedule a FREE Consultation to see how I can help you improve your personal relationships with my Personal Relationships 3 Month Transformational Coaching Program.
Miller, R. S., Perlman, D., & Brehm, S. S. (2006). Intimate Relationships (4th ed.). Boston, MA: McGraw-Hill Higher Education.
Nakonezny, P. A. & Denton, W. H. (2008). Marital relationships: A social exchange theory perspective. The American Journal of Family Therapy, 36(1), 402-412.