The components of the theories of social exchange can be traced back to the late 1700s. Classical economists, such as Adam Smith, tried to explain behaviors in an economic system. Smith believed than when given the freedom to choose, both sides in an exchange would make moves that benefit themselves and use resources more efficiently. Social exchange theory was formulated in the late 1950s by George Homans. He used the principles of economic theory to explain human behavior in social interaction and relationships as an attempt to increase the social benefits of both parties.
The theory suggests that we make an internal survey on what we can get and what we have to give up in a relationship or interaction. If we expect to receive something valuable, such as affection or prestige, a voluntary offer is put forth, with the expectation that we will receive something of similar value in return. Thus, the more we expect to benefit from a relationship, the more we interact in that relationship.
The theory of social exchange is often seen as a variation on rational choice theory in economics. Rational choice and social exchange theory both assume that participants make internal cost-benefit analysis. When people have the freedom to make choices in an economic market, they choose those that benefit them economically. We no longer perform economic interactions with a party if someone else offers greater benefits, much the way we cease a relationship when it becomes too costly.
Social exchange theory is often used by psychologists to help those in marital or relationship problems. A psychologist often looks at the rewards of the relationship to determine how both sides may benefit from a partnership. An example of how a psychologist may use social exchange theory to balance a relationship is the area of household chores. If a partner complains about having to do all the chores, this is a sign that one side of the relationship feels that it is not receiving a reward for performing domestic tasks. Splitting chores could remedy this and further the positive expectations of the relationship.
"Social Psychology: Sociological Perspectives" offers several major criticisms of social exchange theory. Boiling social exchanges down to desires for great power and social standing seems too simplistic and dehumanizing for something as complex as social interaction. Others critique the individualism of social exchange; social decisions are not just individual choices, but decisions affected by the norms of a society.