Social Exchange and Equity Theory

In the last byte, we looked at the positive energy and full engagement theory and attempted to understand it. In today's byte, we will look at Social Exchange and Equity theory and attempt understanding it.

Social exchange theory is based on a central premise: that the exchange of social and material resources is a fundamental form of human interaction. The focus of this theory is that Individuals interact for profit or the expectation of it. Power and Exchange are important considerations in understanding human behavior. Simply put, we could present the behavior of an individual as follows:

Behavior (Profits) = Rewards of interaction - Costs of Interaction.

The difference between the Equity and Exchange theories could be looked at as below:

• Exchange theory is based on the principle that we enter into relationships in which we can maximize the benefits to us and minimize our costs.
• Equity theory, a variation of exchange theory, holds that exchanges between people have to be fair and balanced so that they mutually give and receive what is needed.  

The basic theory of extend by Amitai Etzioni who developed three categories of exchange relationships between people:

1. Committed Involvement
2. Calculated Involvement
3. Alienated Involvement.

We shall attempt to continue understanding the discussion on social exchange theory over the next few bytes.