The main difference between rational choice theory and exchange theory is that rational theory states that individuals use logical calculations to make rational choices and achieve results that are aligned with their own personal goals whereas social exchange theory states that social interactions are based on a system of punishments and rewards.
Both rational choice and exchange theory assume that individuals always make rational choices after assessing the rewards/benefits and punishments/costs. Basically, exchange theory is the application of the rational choice theory to social interactions.
Key Areas Covered
1. What is Rational Choice Theory
– Definition, Characteristics
2. What is Exchange Theory
– Definition, Characteristics
3. What is the Relationship Between Rational Choice Theory and Exchange Theory
– Outline of Common Features
4. What is the Difference Between Rational Choice Theory and Exchange Theory
– Comparison of Key Differences
Key Terms
Exchange Theory, Rational Choice, Social Exchange Theory
What is Rational Choice?
Rational choice theory is a school of thought based on the theory that individuals use logical calculations to make rational choices and achieve results that are aligned with their own personal goals. The basic premise of this theory is that aggregate behaviour results from the behaviour of individuals, each of whom makes their own choices, based on their preferences and constraints they face. Moreover, individuals generally make logical and wise decisions that result in most benefits. When an action can be evaluated in terms of costs and benefits, individuals choose the action that has the most benefits and fewer costs. Thus, it is possible to generalize that individuals in society act the way they do because they believe actions they choose have more benefits than costs.
Furthermore, the rational choice theory has a base in economics, political science and sociology. Concepts like rational actor and rationality assumption are always associated with this theory. Rational actors actually refer to the individuals making rational choices based on rational calculations and rationally available information. Rationality assumption, on the other hand, refers to the expectation that individuals will always select from a set of choices, the one that will maximize utility.
To sum up, the rational choice theory states that people make decisions based on the rational choices. These choices are made based on their personal goals, and these choices or decisions govern their behaviour.
What is Exchange Theory?
Exchange theory, to be more precise social exchange theory, is a theory that states social behaviour is a result of an exchange process. Here, this exchange process includes maximizing benefits or rewards and minimizing costs or punishments. Moreover, the social exchange theory describes society as a series of social interactions, which are based on rewards and punishments. If we compare exchange theory with rational choice theory, it is possible to say that exchange theory is the practical application of rational choice theory into social interactions.
According to social exchange theory, individuals are more likely to repeat actions that result in rewards than actions that result in punishments. Similarly, an interaction that elicits rewards is more likely to be repeated than an interaction that punishment. Both rewards/benefits and punishments/costs can come in many forms. Rewards can include money, recognition, prestige, approval, or even positive gestures like a smile or a pat in the back. Punishments, on the other hand, include humiliation, loss of money, or a negative gesture like a frown or even a raised eyebrow.
Most interactions may have both rewards and punishments. However, it is possible to calculate the degree of reward or punishment you may receive from an interaction. If the reward for an interaction is greater than punishments, then that interaction is more likely to occur.
Relationship Between Rational Choice Theory and Exchange Theory
- It is possible to say that exchange theory is the application of the rational choice theory to social interactions.
- Both theories have a system of cost-benefits at its core. In both these theories, the action of individuals depends on the costs and benefits given by action.
- Moreover, these theories do not take individuals’ impulsive decisions into account.
Difference Between Rational Choice Theory and Exchange Theory
Definition
Rational choice theory is a theory that states that individuals use logical calculations to make rational choices and achieve results that are aligned with their own personal goals while social exchange theory is a theory that describes society as a series of interactions between individuals that are based on estimates of rewards and punishments.
Nature
Social exchange theory is basically the practical application of rational choice theory into social interactions.
Field
The rational choice theory has a basis on sociology, economics, politics, and many other fields, whereas social exchange theory is a sociological and psychological theory.
Conclusion
Hence, in conclusion, the rational theory states that individuals use logical calculations to make rational choices and achieve results that align with their own personal goals. In contrast, social exchange theory states that social interactions are based on a system of punishments and rewards. Thus, this is the main difference between rational choice theory and exchange theory.
Reference:
1. Cherry, Kendra. “Understanding Social Exchange Theory in Psychology.” Verywell Mind, Verywell Mind, 25 Oct. 2019, Available here.
2. Crossman, Ashley. “Learn How Rational Choice Theory Explains Your Economic Decisions.” ThoughtCo, ThoughtCo, 21 Jan. 2019, Available here.
3. “Rational Choice Theory.” Wikipedia, Wikimedia Foundation, 30 Oct. 2019, Available here.
Image Courtesy:
1. “Decision Choice Path Free Photo” (CC0) via Needpix.com
2. “1015568” (CC0) via Pexels
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