1. Social Exchange Theory Presented by: Seyedreza Mousavi February 2012

2. Rational Choice Theory Rational decision making entails choosing an action given one's preferences, the actions one could take, and expectations about the outcomes of those actions. Action Cost Reward Utility

3. Preferences Strict Preference Weak preference Indifference

4. Assumptions of RCT Rationality (more is better than less) All the costs are external Completeness Transitivity Perfect information An individual has the cognitive ability and time to weigh every choice against every other choice.

5. Operant Conditioning Reinforcement –Positive reinforcementPositive reinforcement –Negative reinforcement Punishment –Positive punishment –Negative punishment Extinction Satiation

6. SOCIAL EXCHANGE THEORY George C. Homans

7. Resources –Money, love, status, information, good, and service Rewards –Received resources Costs –Spent resources Value –Value = Rewards – Costs Key Concepts

8. Principle of Satiation –Loosing value due to increased availability Principle of Deprivation –Increasing value due to decreased availability

9. Key Concepts Comparison Level (CL) –Societal norms, past experiences, observations –Satisfaction = Value - CL

10. Key Concepts Comparison Level of Alternatives –Evolving Subjective Individual Standard

11. Propositions Value> CL > Clalt = Satisfying and stable Value> CLalt > CL = Satisfying and stable CLalt > CL > Value= Unsatisfying and unstable CLalt > Value> CL = Satisfying and unstable CL > CLalt > Value= Unsatisfying and unstable CL > Value> Clalt = Unsatisfying and stable

12. Reciprocity –The concept of interdependence Power –Greatest Resources –Control over punishment and reward –Least Interested Distributive Justice Equity –Both individuals derive similar levels of rewards Trust SET Principals

13. Commitment –Social and Intimate Exchanges Normative Orientations –Societal/ Cultural views on appropriateness of behavior in relationships

14. Assumptions Individuals seek rewards and avoid punishments. Rationality assumption of rational choice theory holds the idea that parties “calculate the best possible means to compete in rewarding situations.” Information access Parties involved in the interaction are goal-oriented. Individuals’ standards used to evaluate the value can differ from person to person and can change over time. Repetition of the exchanges creates patterns of social interactions that develop social structures and lead to power differentiations.

15. Criticisms Assumes humans act rationally when deciding on an exchange Some issues are difficult to explain effectively utilizing exchange theory such as altruism Limited to dyadic relationships

16. TWO APPROACHES TOWARD SET Individualistic VS. Collectivistic

17. Individualistic Homans and Emerson The relational aspect is individualistic

18. Collectivistic Malinowski, Levi-Strauss, and Ekeh The relational aspect is collectivistic

19. IS Relevance Complex IT adoption IT Outsourcing