Rational choice-exchange theory | Society and Culture | MCAT | Khan Academy

Voiceover: All right,
so here we are going to talk about rational choice theory and
exchange theory. Both center on economics. It has long been assumed that people are
motivated by money. Get the most for your money, right? Then some sociologists theorized that
people were motivated by is what is best for them in all their actions, and that their actions were
shaped by their desire for more, rather than less, of
something good. This led to the development of rational
choice theory. The main assumption behind rational choice
theory is the idea that everything people do is
fundamentally rational. Rationality here means that a person is
acting as if they were weighing the cost and benefits of possible actions so that they can maximize their personal
gain. Rationality is a property of a series, or a pattern of choices, not an individual
choice. So basically, people act in self-interest. They are driven by personal desires and
motivated by personal goals. They calculate the costs and benefits of
every action and choose the one with the best outcome
for themselves. And how do we calculate the value of these
actions? How do we know which anticipated outcomes
will benefit us the most? Well, we look at the social resources
being exchanged. Like time, information, approval, and
prestige to determine the value of a possible action. Through the individual rational actions of
people, rational choice theory assumes that you can explain complex phenomenon like social change and social
institutions. Let’s take a look at the three assumptions
underlying rational choice theory. First is the assumption of completeness,
which means that every action can be ranked. If there are three possible actions I can
take, completeness means that none of the options have an equal
value to me. A is preferable to B and B is preferable
to C. And that C is not then preferable to A
because that would be circular and irrational
according to our definition. This leads to the second assumption:
transitivity. This means that if we take a look at those
three options I have, since A is preferable to B is preferable to C,
then A is also preferable to C. It’s like in math. A is greater than B is great than C,
therefore, A is greater than C. The last assumption is called independence
of irrelevant alternatives. That’s just a big fancy way of saying
that, if I suddenly have a fourth option, X, that it won’t change the order
of how I ranked the first three options. I already have A is better than B is
better than C. If X is better than C but worse than B, B isn’t suddenly going to be preferable
to A. A is still my best option. These three assumptions result in a consistent, rankable set of possible
actions. All right so now that we have an idea of rational choice theory, let’s take a look
at exchange theory. Exchange theory is an application of rational choice theory to social
interactions. It looks at society as a series of
interactions between individuals. And is often used to study family
relationships, work relationships, partner selection,
parenting and many other interpersonal interactions. These interactions are determined by
weighing the rewards and punishments of every
interaction. If the interaction results in approval, it
is more likely to be repeated. Because social approval is a reward. But if the interaction results in a
punishment, like social disapproval, it is less likely to
be repeated. This may seem pretty obvious to you, that,
you’ll do something to get a reward, while you’ll avoid something
that will wind up in punishment. But this is the basic principle behind
exchange theory. That the behavior of an individual in an
interaction can be figured out by comparing the rewards
and the punishments. Rewards can be social approval,
recognition, money, gifts, or positive gestures, like a smile. While punishments consist of social
disapproval, public humiliation, or negative gestures, like a
frown. There are quite a few assumptions that
exchange theory depends on. Let’s see if I can get through these
quickly and clearly. First off, people seek to rationally
maximize their profits. Which means they seek rewards and avoid
punishments, right? So, like when you were a kid, you behaved
yourself so you could get a cookie after dinner instead of
being sent to your room. Then is the assumption that behavior that
results in a reward is likely to be repeated. Just like I mentioned before about
rewarding interactions being repeated. But what is interesting is that exchange
theory assumes that the more often some reward is available, the
less value that reward has. Kind of like supply and demand, when
supply is too high, the price goes down. Next it is assumed that interactions
operate within the social norms. Keeps our frame of reference manageable. And just like rational choice theory,
exchange theory assumes that people have access to the information they need
to make rational choices. That’s probably debatable, but for the
sake of this theory it is assumed. It is also assumed that most human
fulfillment comes from other people. The need for other people comes from the
importance of interdependence and social exchange, but
what makes this all even a bit more complicated is you have to
assume that the standards people use to evaluate
interaction to change over time. And that they are different from person to
person. What is seen as a reward to one person
might be a punishment to another person. Phew, all right, assumptions out of the
way. So, we have these interactions that make
up society, but exactly what kind of
interactions are they? Well, central to social exchange are the
concepts of self-interest and interdependence that
guide human interactions. We form relationships in order to benefit
ourselves and because we depend on other people to
live. Most people in our modern society cannot
be completely self sufficient. And by that I mean, we can’t go off into
the woods alone and expect to survive for any
extended period of time. We analyze our interactions with other
people and form relationships based on our own subjective interpretation of what the rewards and punishments of each
interaction are. And we base our subjective ideas of our
interactions on the social expectations of what
behavior is acceptable. Which is in turn determined by society’s
rules, norms and values. There are, of course, criticisms of rational choice theory and social change
theory. The first one that popped into my head was, seriously, do we really make rational
choices? We often do things that aren’t rational. For example, why do I eat Ramen noodles,
when I know it’s really not good for me, and I can make myself something that actually tastes better in the same amount
of time? I’m not really sure how to answer that
one. There’s some people whose choices are
limited by social factors like gender, or
ethnicity or social class that pressures them to make a
choice that isn’t in their best interest. Against rational choice theory in
specific, some critics asked that if people always seek to benefit themselves, why would anyone do something that benefits others more than
themselves? It contradicts the main idea that people
are motivated by what is best for them. Then there is the question of why some
people follow social norms that cause them to act in the best
interests of other people. Like, paying taxes or volunteering. The third main criticism is that, is it
really possible to explain every single social structure
by the actions of individuals? Critics of exchange theory dislike that it
reduces all human interactions to a rational process of
comparing pros and cons. It also tries to put the formation of
relations into a linear process, but that isn’t
always linear. Critics point out that relationships can
move backward or jump ahead. Rational choice theory and exchange theory
attempt to explain society through individuals and
interactions. They assume people make rational choices
based on evaluating the rewards and punishments
of interactions. And that behavior is guided by
self-interest and interdependence.

8 thoughts on “Rational choice-exchange theory | Society and Culture | MCAT | Khan Academy

  1. I am jealous of the way she teaches. Whenever I tutor, I'm always fumbling my words everywhere; but, then again, I tutor spontaneously (i.e. having no prepared notes, etc.)

  2. This is such a pointless and obvious theory to have to memorize the name of. That's something I've noticed. We waste time memorizing names of uninsightful ideas and people instead of learning information relevant to becoming effective doctors.

  3. sociology is 10% science and 90% philosophy. The only science in sociology is the statistical analysis required to publish their papers

  4. so i have a question ,

    Under-socialized view (rational choice theory): formal-legal constraints

    Over-socialized view (cultural theory): moral-normative constraints

    what does this mean ?

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