Social exchange theory is a sociological and psychological framework that explains social interactions and relationships in terms of the costs and rewards that individuals perceive they will receive from engaging in them. Developed primarily by sociologist George Homans and later expanded upon by Peter Blau, social exchange theory posits that individuals engage in social exchanges based on rational calculations of the benefits and costs involved.

Key aspects of social exchange theory include:

1. Rational Choice: Social exchange theory assumes that individuals are rational actors who seek to maximize rewards and minimize costs in their interactions with others. Individuals weigh the potential benefits of a social exchange (such as companionship, support, or resources) against the perceived costs (such as time, effort, or emotional investment) before deciding to engage in it.
2. Rewards and Costs: Social exchange theory identifies various types of rewards and costs that individuals consider in their social interactions. Rewards may include tangible benefits such as material resources or social support, as well as intangible rewards such as emotional support or companionship. Costs may include sacrifices such as time, energy, or personal resources expended in the exchange.
3. Comparison Level: Social exchange theory introduces the concept of a comparison level, which represents individuals’ expectations about the outcomes they believe they should receive from a social exchange based on past experiences and cultural norms. Individuals compare the actual rewards and costs of a given exchange to their comparison level to determine whether they perceive the exchange as favorable or unfavorable.
4. Comparison Level for Alternatives: Social exchange theory also considers individuals’ comparison level for alternatives, which represents their assessment of the potential rewards and costs of available alternative exchanges. Individuals may choose to engage in a particular social exchange if they perceive it as offering better rewards or lower costs than available alternatives.
5. Equity and Fairness: Social exchange theory emphasizes the importance of equity and fairness in social exchanges. Individuals strive to maintain a balance between the rewards they receive and the costs they incur, as well as a balance between their own contributions and the contributions of others in the exchange. Imbalances in exchange relationships may lead to feelings of inequity and dissatisfaction.
6. Applications: Social exchange theory has been applied to various domains of social life, including interpersonal relationships, organizations, and economic transactions. It provides a framework for understanding phenomena such as friendship formation, romantic relationships, economic transactions, and organizational behavior. Social exchange theory has also been used to inform interventions aimed at improving relationship satisfaction, negotiation processes, and organizational effectiveness.

Overall, social exchange theory offers a valuable perspective for understanding the dynamics of social interactions and relationships, highlighting the rational calculations individuals make in their pursuit of rewards and avoidance of costs. It contributes to our understanding of human behavior and social life by elucidating the underlying mechanisms that shape social exchanges in diverse contexts.