Social Exchange and Rational Choice Theory (Foundations of Sociology Series)

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Social exchange and rational choice theory. The most important theories for you to know are these up here, in terms of sociology theories and perspectives. But the MCAT has also added these two as ones that you might be tested on. So, in this lesson, we're looking at, these are actually two theories, sometimes they're sort of described as one, that exchange and rational choice theories.

Social Exchange Theory was created in 1961 and it states that human relationships are negotiated through cost-benefit analyses. And so to do that it uses economic principles and models to explain human behavior. So for example, let's say Mrs. Dobbs is 80-years old, she loves being around children.

Children sadly don't always love being around her. She tells them what they think of as boring stories, maybe. She doesn't understand references to contemporary culture, maybe she's hard of hearing and she can't really hear them well at all. So for the kids it's kind of a frustrating experience. So what does she do?

Well she begins stocking her home with cake, cookies, and candy. And lo and behold soon the kids are coming around every day. So, its a pretty straight forward example, pretty straight forward theory really. But, lets look at the costs and benefits in more detail. So, in this situation, both parties, the Mrs. Dobbs and kids as a collective party, collective whole, decided that the benefits of relationship outweight the costs.

And so they willingly agreed to form this relationship. Mrs. Dobbs has a few different costs, she has, well, financial cost of the snacks which probably isn't that substantial. She has maybe the mental burden and the time commitment of having to restock the snacks and trying to think about what she needs to have on hand when the kids come by.

And then maybe, just thinking a little more abstractly, she might have guilt over what the parents could say about these quantities of junk food and yet the benefits still went out. She gets companionship. She gets joy of being around kids, like the cuteness factor. She feels important in these kids' lives and she has an audience.

The kids have the cost of boredom, frustration, and opportunity costs. Maybe missed opportunities to play or watch TV, but for them the benefits also weight out. They get this yummy food, they get a change of scenery, a sort of novel. They get a feeling of safety maybe and to give these kids like some benefit of the doubt, some credit, maybe they like her stories and over time grow to like them more.

Rational Choice Theory is closely related and it actually evolved out of SET. And Rational Choice Theory says that people make decisions based on what makes sense to them. So the really fundamental word in rational choice theory is, not surprisingly, rational. A behavior is rational, according to these theorist, if it meets three characteristics.

If it contains these elements. It needs to be goal-oriented, reflective, and consistent. And you don't need to memorize these, but these are nice kind of tag words that if, you did see these words come up in some sort of description of a social scenario on the MCAT, you might be able to link this back to rational choice theory. If you were being asked to question about theory and especially this goal-oriented one.

The difference between the two is that while SET focuses exclusively on building and terminating relationships, RCT is broader. It encompasses all sorts of human behaviors, all sorts of decisions. Also, it's, just to kind of put this out here, cuz I didn't know this for years, and I always thought rational choice theorists must not have everything working correctly in their brains.

But it turns out that rational choice theorist do acknowledge that some behaviors are random, are impulsive. But those aren't the behaviors that interest them. They are more interested in actual conscious decision making processes. So here's a very straightforward example of RCT. A recent college grad accepts a new job despite the 1-hour commute.

Why? Well, maybe good pay? Potential for growth? In this case, for whatever reasons, the benefits outweigh the costs. A new college grad probably, I'm guessing, is probably doesn't have kids, might. Maybe about 5% of recent college grads, maybe a little higher.

And hopefully, still has a lot of stamina, so a long workday away from home, although these are costs, aren't big enough cost to outweigh the benefits. Where someone several years or decades older, they might decide that the costs are too big and then forego the job. A somewhat less obvious example, six months after completing a sentence for selling illicit drugs, an individual begins selling illicit drugs again.

Why is this? Well, we're probably looking at structural barriers. And what this means is that this particular individual isn't easily able to make it within the parameters of our society as it is currently structured. And in this case, especially how it is financially structured. A criminal record makes it's hard to get other jobs.

So, taking this job in drug sales, going back to drug sales, actually, might have a higher chance of panning out. Which would make it a benefit in the decision making process. It could be that this person needs money immediately, to support young children or extended family. And, given this, it could be just far too costly to wait for a formal job to pan out.

Also, it's likely that this person still has networks in place, of drug sellers, drug buyers. And so, it's just an easy situation to get back into are maybe not easy, but maybe makes the most sense to that person at that particular time. So in short, the immediate needs are pressing and alternative jobs are long shots.

The benefits of selling drugs for this person, in this situation, outweighs the costs of holding out for a job in the more traditional, formal economy. And that is even though there is still that cost of the potential for being reincarcerated. Praise and Criticism for these theories. So one thing that these theories do really well is they present people as logical decision-making creatures.

And that's in contrast to some theories that describe people more as bundles of nerve, if you're going really biological. Or maybe as driven by unconscious drives, if you're going really psychoanalytic. These theories credit people's intelligence. And also, they kind of have a way of promoting tolerance and compassion. The idea is that people wouldn't do things if they had more appealing options.

People do what makes sense to them, given their situation. And so, coming from this perspective, if you're an SET or RCT theorist, you kind of give people the benefit of the doubt. If they made a certain decision, chances are that they really did think through their options and they came to the best conclusion for them. Where these theories fall short, they underestimate the power of emotions to override rational thought.

And that is independently of the impulse aspect that I highlighted earlier. Emotions in a more consistent long drawn out way can have the big big impact even if it's not impulsive behavior we're talking about. They don't explain self sabotaging behaviors. People often halt their own success due to guilt or low self-esteem, fear of change. So even when people land upon a decision that really does make sense to them rationally, they might self-sabotage and act in the opposite way or in some other direction.

So here's a question. What is true of both Social Exchange Theory and Rational Choice Theory? Are they both functionalist? Are they both symbolic interactionist? Do they both apply economic models to relationship formation? And have both models fallen out of favor?

Well, it's interesting to think about them as being potentially functionalist. Functionalists believe that societies are always trying to achieve homeostasis and that this drives individual behaviors. So are these people trying to maintain homeostasis, possibly, but these theories are very, very individualistic. Functionalism is all about the bigger whole, so I'm gonna cross that out.

How about symbolic interactionism? Well, you know, symbolic interactionism, actually both of these really, they're their own theories. Social Exchange Theory, Rational Exchange Theory, these are not subsets of the major three. These are these are kind of alternatives to the major theories.

So it is very possible that someone could be a for instance a rational choice theorist and also a symbolic interactionist but it's also just as likely that they are not symbolic interactionists at all. They are looking at economic models, and they are making certain conclusions based on their models of human behavior. Look at this, I just gave it away.

They apply economic models to relationship formation. So the first example, SET, that was very obvious. But with RCT, remember that that is growing out directly from SET. So just the process of looking at pros and cons, cost, benefits, those are economic models. So yes, this is true.

And then is it true that both models have fallen out of favor? Well, in some circles, they might say so. But overall, there are still many people who are advancing these theories, making them more complex, more elaborate, better, really. And so, I feel totally comfortable crossing those out. C is our answer.

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