According to social exchangetheory, ‘social exchange’ is a situation in which the actions of one personprovide the rewards or punishments for the actions of another person and viceversa in repeated interactions (Blau 1964).
mere one-time exchange in a market place, where a buyer is able to enterinto exchange with one seller on one occasion, with another on anotheroccasion, and so forth depending on the prices offered by sellers, does notqualify as a social relationship. Through repeated interactions relationshipsgrow, develop, deteriorate, and dissolve as a consequence of an unfoldingsocial exchange and coordination process, which may be conceived of as abartering of rewards and costs between the partners (Blau 1964; Homans 1961).The benefits of social interaction are intrinsic in nature and have no exactprice.Since it is unspecific, it isdifficult for the partners to bargain how to reciprocate or force each other toreciprocate. Since there is no way to assure an equivalent return for a favor,social exchange requires trusting others to discharge their obligations.
Theestablishment of friendly partnership requiresmaking investments thatconstitute commitments to the other party. But it demands trusting others toreciprocate and also proving oneself trustworthy. (418)This happens because unlikethe economic exchange, social exchange lacks strict accounting (Blau 1964) andthe partners are never certain about how much in debt they are to each other,and therefore strong feelings of moral obligation to repay are continuallybeing generated and reinforced. A partner can fulfill this obligation in atleast two ways. The first way is increasing the level of inputs to therelationship already being provided. This may increase the feeling in the otherpartners that theyare being out-given, arereceiving more than they are giving, or receiving more than they think theydeserve (Homans 1961).
The second way is to demonstrate their reciprocalgratitude by committing additional resources that would constitute a reward tothe party that is over-giving. Such reciprocalbehaviors expand the range of resources beingexchanged and result in partners acquiring new information, skills, andexpertise.