What is Social Exchange Theory?

Social exchange theory is how people assess their relationship in terms of costs and rewards. All relationships require some time and effort on the part of their participants. The social exchange theory argues that people calculate the overall worth of a particular relationship by subtracting its costs from the rewards. This can be looked at as an equation worth = rewards - cost. Costs are the elements of relational life that have negative value to a person. Rewards are the elements of a relationship that have positive value. This theory predicts that the worth of a relationship influences its outcome.

Who created Social Exchange Theory?

In 1958, George Homans published an article, “Social Behavior as Exchange”. The textbook says, Homans examined the idea of exchange in small groups and it was later explored in interpersonal relationships. The theory is unique in the sense that it doesn’t necessarily measure relationships on emotional metric but, math and logic to determine balance within a relationship. Homans studied small groups, and he first believed that any society, community or group was best seen as a social system. He developed a framework of elements of social behavior: interaction, sentiments and activities. Homans said several propositions that theorize social behavior as an exchange of material and non-material goods, like time, money, effort, approval, prestige, power, etc. Every person provides rewards and endures costs. People expect to receive as much reward as they give to another and will choose actions that are likely to provide the greatest reward. In the following years other theorists have added on to the concept, including Ronald Sabatelli, Constance Shehan, Michael Roloff, John Thibaut and Harold Kelley.

Social Exchange Theory in Relationships

Some assumptions that social exchange theory makes about human nature are that humans seek rewards and avoid punishments, humans are rational beings, the standards that humans use to evaluate costs and rewards vary over time and from person to person. Roloff says the notion that humans seek rewards and avoid punishment is consistent with the conceptualization of drive reduction. This approach assumes that people’s behaviors are motivated by some internal drive reduction. Some assumptions that social exchange theory makes about the nature of relationships are that relationships are interdependent and relational life is a process. This rests on the notion that within the limits of the information that is available to them, people will calculate the costs and rewards of a given situation and guide their behaviors accordingly. Also, if faced with no rewarding choice, people will choose the least costly alternative.

The length of a friendship or romantic relationship can also play a role in the social exchange process. During the early weeks or months of a relationship, also known as the "honeymoon phase," people are more likely to ignore the social exchange balance. Things that would normally be viewed as high cost are dismissed or minimized, while potential benefits are often exaggerated. When this “honeymoon” period comes to an end, there will often be a gradual evaluation of the exchange balance. The downsides of the relationship will become more apparent and benefits will start to be seen more realistically. This readjustment of the exchange balance might also lead to terminating the relationship if the balance is tipped too far toward the negative side.

Squid Game and Social Exchange Theory

Squid Game is a South Korean television series on Netflix. The series revolves around a contest where 456 players, all are in deep financial debt, risk their lives to play a series of deadly children's games for the chance to win a ₩45.6 billion prize, which is equivalent to about $39 million.

In this series, a group of elite host a Hunger Game’s type event where the contestants have a chance to win ₩45.6 billion. Each contestant the group of elite invite to participate are in some type of financial debt with all different types of stories. The 456 players participate in their first event which is to play a “squid game” which translates to a childhood game. If they fail this game, which is a highly likely outcome, it results in death. After the contestants realize if they fail it will result in death, they are given the choice to come back and play.

At this point in the show, the contestants have been through the first game and see the contestants who fail die. They say this is not outweighing the benefits, so they want to leave. The group of elite tell them they can leave, and in a week they can come back if they reconsider. Over two thirds of the contestants come back. This includes Gi-hun, whose mother needs surgery, Sang-woo, who is about to be arrested for financial fraud, Player 001, who does not wish to die in the outside world, Player 067, who wishes to rescue her parents from North Korea and get her little brother out of an orphanage, Player 199, a Pakistani migrant worker who attacked and gravely injured his boss for withholding his wages, and Player 101, named Jang Deok-su, a gangster on the run from gambling debts, and Player 111, a intelligent doctor in the outside world.

The series revolves around main character Seong Gi-hun. Gi-hun is described as having accumulated enormous debts with loan sharks while becoming estranged from his daughter and ex-wife. His mom, who is his only family who has not left him, is very sick and needs an expensive surgery.

Worth (Outcome) = Rewards - Cost

The main benefits of winning this game would be winning ₩45.6 billion. If he won this money he could pay all his debts, prove to his estranged family that he is responsible and be welcomed back into their lives, essentially be happy and have all his problems solved ever in his whole life. Also, all the dreams he acquires while he is playing the squid games to do when he wins. To win the game, you have to put yourself out there and play the game.

Some smaller benefits include during the game where you start to form alliances and share strategies. To be welcomed into someone’s alliance, they have to weigh the cost of you vs. what you bring to the table. Two players form a romantic and sexual relationship that they may not have had if they were not playing the games. Every time a contestant does die it adds more money to the reward, encouraging deaths.

There are many costs over before, during, and after the squid games. The main cost is dying. Right in the beginning, Gi-hun gets knocked unconscious. All 456 contestants have to share a dormitory jail style living environment patrolled by masked men who do not give out any information. Every time you play a new game, many contestants die in a violent way in front of you. There are riots at night causing you to not be able to sleep for the next day’s game that results in life or death, but making sure you stay alive during the night. The lack of sleep contributes to illness, hallucinations, and not enough energy to survive the games. They also have a lack of food, if that small portion does not get taken by somebody else. You have to be on alert always, which is also hard after performing a squid game. There are also physiological costs such as betraying your close friends- resulting in their deaths, keeping secrets from the past and not facing your own personal fears, the outside not knowing anything that is going on with you, and dying in a tragic way such as being shot by a guard, gang banged by fellow contestants, or getting your neck broken after walking the plank. Some contestants also end up dying from infections, pneumonia, broken bones where there is no medical help.

This theory also applies to the relationships in the series because each contestant has to think of the rewards out benefiting the costs in forming an alliance with another person. The reward would be a person helping you survive, the cost would be that person could betray you at any time resulting in your death. Gi-hun allows an elderly, ill man to be on his team. This benefited him as the older man knew how to win tug of war, and when they were playing marbles against each other the older man let Gi-hun win, letting him survive. The older man held him back in many ways, physically, and the other contestants viewed their team as weaker.

Player 111, a disgraced doctor, secretly works with a handful of staff to harvest organs from dead players to sell on the black market, in return for information on upcoming games. He sneaks out during the night, risking getting caught by the guards and death, also risking his sleep that will make him lack energy in the next day’s game.

When you put the information from the television series in this equation, the costs seem to outweigh the benefits. Money is not better than death, but that is not the way the contestants see the equation. The contestants have already experienced the lowest of lows- getting family taken away from them, losing all their money, getting jumped by people they owe money to, being a live organ donor in exchange for settling their debts. Before you set up the equation, you have to ask yourself what is worth everything? To the contestants, they would rather lose and die than go back to their old lives.

Social exchange theory is relevant in interpersonal relationships, marriages, business, work settings, community behavior, and even online social networks.

What other pop culture television shows can you figure back to social exchange theory?

Work Cited

1. Homans, George (1961). Social Behavior: Its Elementary Forms. New York: Harcourt Brace Jovanovich. p. 13.
2. Karen S. Cook and Erick R. W.Rice. Department of Sociology, Stanford University, Stanford California 94305. Handbook of Sociological Theory, edited by Jonathan H. Turner. kluwer Academic/ Plenum Publishers, New York.[page needed]
3. Cook, Karen S.; Rice, Eric (2006-11-24). "Social Exchange Theory". In DeLamater, John (ed.). The Handbook of Social Psychology. pp. 53–76. ISBN 978-0-387-36921-1.
4. Emerson, R M (1976). "Social Exchange Theory". Annual Review of Sociology. 2: 335–362. doi:10.1146/annurev.so.02.080176.002003.
5. Michie, Jonathan (2001). "Reader's Guide to the Social Sciences". Retrieved 2018-12-08.
6. Palmisano, Joseph M. (2002). "World of Sociology, Gale". Retrieved 2018-12-08.
7. West, Richard, and Lynn Turner. Introducing Communication Theory: Analysis and Application. 6th ed., McGraw-Hill Education, 2017.