Law #5: Equity and Social Exchange Theory

What is the Equity Theory?

Sometimes, love isn't enough to sustain a relationship. In this lesson, we discuss the importance of equality in a relationship by defining equity theory. We go through the theory's proposals and how it predicts when we are most likely to stay in certain relationships.

'All you need is love.' This sentiment may have started with the Beatles' song, but chances are you've heard it dozens of times and used for different meanings. One - the notion that love is the only thing that's needed to keep a relationship going - is certainly romantic, but it may not be very realistic. Sometimes, even if a couple is in love, the relationship doesn't last. Why? One explanation could come from equity theory, which suggests that people are more satisfied with a relationship in which there is equal give and take by both parties.

Equality in Relationships

This theory proposes that a person's motivation to stay in any relationship is based on the equality (or inequality) of the contributions made to the relationship by each person. For example, much like any barter system, we tend to trade our friendship for the friendship of others. Imagine you just met someone new, named Samantha, at work. Over a couple of weeks, as you talk more and spend more time together, you become friendly. You buy her lunch one day, and she buys you lunch a few weeks later in return. She does you a favor; you do her a favor. You invite her to a party; she invites you to a party. As long as the give and take is equal, the relationship remains stable and is considered satisfactory.

Proponents of equity theory say the same is true of our intimate relationships: lovers, best friends, close family members, and so on. An equal exchange of benefits results in the most satisfying, long-term relationships. This may seem shallow; after all, don't we sometimes do things for our loved ones just because we love them? Yes, we do. But, just because the bartering system isn't as short-term as that in casual relationships doesn't mean it's non-existent. In longer-term relationships, the exchange is no longer tit-for-tat, nor is it necessarily kept track of. Instead, it's a more holistic bartering system.

For example, if you are in a serious romantic relationship, you and your partner probably don't keep track of the equality of your relationship by exchanging daily favors. You respond to each other's needs even when reciprocation is impossible. If you take care of your partner when he or she is sick, you aren't looking for instant repayment. The equity comes in the effort each of you is willing to put into the relationship as a whole, during the long-term. As long as the contributions are perceived as equal, the relationship remains stable and happy.

"All relationships have a give and take. We weight the rewards and costs of developing relationships and engage in those that enable us to maximize our profits. This is the social exchange theory. Profits= Rewards - Costs."

To keep a relationship healthy, the woman must perceive that she
is giving some sort of value to the man. Women do not respect men
they take advantage of.

Predictions

So, in either a short-term friendship or a long-term romance, what happens when the contributions are unequal? Equity theory predicts that if either person in a relationship perceives inequality, both individuals would feel uneasy and be motivated to restore equity to the relationship as soon as possible. If that doesn't happen, then discontent may result in long-term problems or even the termination of the relationship.

For example, your friendship with Samantha could easily become unbalanced. Imagine that over the course of a month, you did several favors for her, yet she refused to help you anytime you asked. You would probably feel taken advantage of and not want to continue the friendship. Likewise, imagine that after several years of dating, you feel guilty because you just don't love your partner as much as he or she seems to love you. Unless something changes to put the relationship back on the equal ground, you would likely prefer to not continue dating that person.

A healthy relationship is mutually beneficial.

Lesson Summary

In summary, equity theory suggests that people are more satisfied with a relationship in which there is equal give and take by both parties. This theory proposes that a person's motivation to stay in any relationship is based on the equality (or inequality) of the contributions made to the relationship by each person. As long as the contributions are perceived as equal, the relationship remains stable and happy.

Equity theory predicts that if either person in a relationship perceives inequality, both individuals would feel uneasy and be motivated to restore equity to the relationship as soon as possible. Whether you feel under-benefited or over-benefited, the theory predicts that unless something changes to restore equity to the relationship, the inequality leads to problems and possibly termination of the relationship.

What is Social Exchange Theory?

Social Exchange Theory Definition

Can you think of someone that used to be your friend but whom you never see anymore? How many people would you say have left your life, even if they were at some point very important to you? It's a fact of life that not all friendships or romances last forever. But why? Why do we stay connected with some people but not to others?

In another lesson, we discussed the fact that an equal exchange of benefits is desirable and perceived inequality puts a relationship in jeopardy. However, there is another theory used to explain why we choose to start and continue only certain relationships. Social exchange theory proposes that the relationships we choose to create and maintain are the ones that maximize our rewards and minimize our costs. According to this, we are more self-centered and not necessarily concerned with equality. The basic idea is that relationships that give us the most benefits for the least amount of effort are the ones we value the most and are likely to keep long-term.

It is important to note that social exchange theory is a bit more complex than a simple economic model of costs and rewards. It actually suggests that we feel positively or negatively about our relationships because of a combination of three factors:

1. Cost-benefit analysis
2. Comparison level
3. Comparison level of alternatives

Let's go over the definition of each one of these components.

Cost-Benefit Analysis

First, a cost-benefit analysis is a process for calculating the value of a relationship in terms of potential rewards and costs. The potential costs of a relationship are those things that we see as negative: being needy, annoying habits, and so on. The rewards or benefits of a relationship are those things that we see as positive: desirable personality traits, physical attractiveness, how we feel when we are around him or her, and so on. This cost-benefit analysis is the economic model that can predict or keep track of our net rewards and the overall value of the relationship.

For example, imagine that Bridgette Bachelorette is trying to decide between three potential suitors. Bridgette conducts a cost-benefit analysis and determines the initial value of each potential relationship by subtracting the perceived costs from the perceived benefits. She chooses the suitor with the best results, which happens to be Brad Bachelor. She may dislike his lack of money and quick temper but feels that the benefits (he is handsome, caring, and fun to be around) outweigh the costs.

Comparison Level

According to social exchange theory, we use a cost-benefit analysis at the beginning of a relationship to help us decide if we want to start it. However, we also continue to use cost-benefit analysis as the relationship develops to decide if we want to continue it. The same is true of the other two components of social exchange theory mentioned earlier: comparison level and comparison level of alternatives. Comparison level refers to the expectations for the relationship based on past experience. Basically, we compare the costs and benefits of the current relationship to the costs and benefits of our past relationships. Some people have a high comparison level and expect a high number of rewards.

For example, Bridgette Bachelorette is used to having rewarding relationships with boyfriends who pay a lot of attention to her and treat her well. She will expect her relationship with Brad to be similar. If it is not, we would predict that she may rethink her decision of dating him. However, another woman may have a much lower comparison level. We could predict that this second woman would be much happier in the same relationship with Brad because her expectations are not as high.

Comparison Level of Alternatives

The third component of the theory is comparison level of alternatives. This refers to the expectations for the likelihood of a better alternative. Someone with a high comparison level of alternatives is more likely to make new friends and switch between romantic partners. Bridgette has a high level, and she is self-confident and sure that she has plenty of fish in the sea that she could easily catch.

So, in order for Bridgette to stay with Brad, she must believe that being with him is better than being single and also better than being with any other suitor that she could have. In contrast, a woman with a low comparison level for alternatives is more likely to keep her current friends and even bad romances. Even if being in a relationship with Brad ends up being costly, this second woman would likely stay in the relationship because she believes she couldn't do any better.

Lesson Summary

In summary, social exchange theory proposes that the relationships we choose to create and maintain are the ones that maximize our rewards and minimize our costs. The basic idea is relationships that give us the most benefits for the least amount of effort are the ones we value the most and are likely to keep long-term.

According to this theory, we feel positively or negatively about our relationships because of a combination of three factors:

1. Cost-benefit analysis
2. Comparison level
3. Comparison level of alternatives

Cost-benefit analysis is a process for calculating the value of a relationship in terms of potential rewards and costs. It is an economic model that can predict or keep track of our net rewards and the overall value of the relationship. Comparison level refers to the expectations for the relationship based on past experience. Basically, we compare the costs and benefits of the current relationship to the costs and benefits of our past relationships. Finally, comparison level of alternatives refers to the expectations for the likelihood of a better alternative. In other words, could you do better than your current relationship or would you be better off being without the relationship at all?