Generalized exchange
1800s: Martineau · Tocqueville · Marx · Spencer · Le Bon · Ward · Pareto · Tönnies · Veblen · Simmel · Durkheim · Addams · Mead · Weber · Du Bois · Mannheim · Elias Generalized exchange is a type of social exchange in which a desired outcome that is sought by an individual is not dependent on the resources provided by that individual.
[2] Examples of generalized exchange include; matrilateral cross-cousin marriage and helping a stranded driver on a desolate road.
[4] Generalized exchange according to this logic, is a common feature of business organizations, neighborhoods, and the vast and growing network of online communities.
[9][10] In indirect exchanges, we observe reduced emotional tension between the partners, a credit mentality, collective orientation and high levels of solidarity and trust.
[11] Experimental evidence shows that people respond strategically to the presence of others, cooperating at much higher levels when reputational benefits and possibilities or indirect reciprocity exist.
[12] Individuals have a tendency to reward givers and penalize non-givers - which is often explained from the perspectives of prosocial behavior and norm enforcement.
An American sociologist Richard Marc Emerson (1981) further distinguished between two forms of transactions in direct exchange relations: negotiated and reciprocal.
[17][18] Along these lines, Yamagishi and Cook[19](1993) and Takahashi[20](2000) note that emphasis on collective aspects of generalized exchange neglects elements such as: the high risk of the structure, the potential for those who fail to give to disrupt the entire system, and the difficulty of establishing a structure of stable giving without initial levels of high trust or established norms.
[21] American sociologists: Karen S. Cook,[22] Richard M. Emerson, Toshio Yamagishi,[23] Mary R. Gillmore,[24] Samuel B. Bacharach,[25] and Edward J. Lawler[26] all study negotiated transactions.
Reciprocal transactions are distinct from pure economic exchanges and are typical in many interpersonal relationships where norms curtail the extent of explicit bargaining.
The same authors also show in their simulation study that strategy of rewarding reputation produces an evolutionary stable system of generalized reciprocity.
Google for example, uses a peer-to-peer bonus system that empowers employees to express gratitude and reward helpful behavior with token payments.
To encourage knowledge exchange, large organizations employ knowledge-sharing communities in which they post and respond to requests for help around work-related problems.
In a similar way, sometimes individuals may intend on taking a certain action and failing to do so either through human error (e.g. forgetfulness) or due to circumstances that prevent them from doing so.
Kinship connects individuals inside the society hence the exchange exists solely for survival purpose because of the low level of role specialization.
Modern society steps out of small and kinship-based town and integrates heterogeneous individuals that vary in their education, social class, religions, nations and races.
However, Malinowski studies the kula ring exchange on some island and concludes that individuals participate in the ritual or ceremony out of their own needs, where they feel satisfied as a part of the society.
Subsequent social theorists proposed more feasible solutions that prevent free rider problem in generalized exchange systems.
[2] Tit-for-Tat strategy was originally introduced in game theory in order to provide solution to Prisoner’s dilemma by promoting mutual cooperation between two actors.
In an effort to propose a strategy to solve the social dilemma aspect of generalized exchange, Yamagishi and Cook (1993)[4] analyzed the effect of network structures on group members’ decisions.
They basically claim that group-generalized exchange involves free rider problem as it is rational for any member to receive resources from pool without contributing.
On the other hand, network-generalized exchange limits the occurrence of this problem as it is easier to detect free riding member and punish him/her by withholding resources until s/he starts to give.
In another study, biologists Boyd and Richerson (1989)[45] presented a model of evolution of indirect reciprocity and supported the idea that downward tit-for-tat strategy helps sustaining network-generalized exchange structures.
In summary, these studies show that for a generalized exchange system to emerge and survive, a fixed form of network that consists of unidirectional paths is required.
However, according to Takahashi (2000),[2] the requirement of a fixed network structure is a major limitation since many of real world generalized exchange systems do not represent a simple closed chain of resource giving.
The new model proposed by Takahashi (2000),[2] solved the free rider problem in generalized exchange by imposing particular social structures as little as possible.
He showed that this argument can hold in two evolutionary experiments, in particular, pure-generalized exchange can emerge even in a society in which members have different standards of fairness.
In addition to qualitative and ethnographic research, scholars have also studied generalized exchange through targeted lab experiments as well as programmed simulations.
Generalized exchange has further studied through real life experiences, such as participation in public good conservation programs when one is recognized for doing so as opposed to when one’s name remains anonymous.
[44] Generalized exchange structures can be statistically represented by blockmodels, which is an effective method for characterizing the pattern of multiple type and asymmetric social interactions in complex networks.
