Power in Negotiated and Reciprocal Exchange

Abstract

While classical exchange theorists excluded bargaining from the scope of their theories, most contemporary theorists have done the opposite, concentrating exclusively on negotiated exchanges with binding agreements. We analyze how the form of social exchange—negotiated or reciprocal— affects the distribution of power in exchange networks. These two forms of exchange differ in fundamental ways that affect how actors use power and the kinds of risk and uncertainty they face. We predict that these basic differences will affect the relation between the availability of alternative partners and actors’ use of power, and will produce lower power use in reciprocal exchange than in negotiated exchange. We test our predictions in a laboratory experiment. The results support the underlying logic of our theory, partially support its specific predictions, and raise new questions about the importance of the different time perspectives required by negotiated and reciprocal exchange.