Exchange & Power in Social Life By Peter Blau, 1986 has an excellent discussion of the importance of taking into account both micro and macro considerations in understanding the dynamics of personal and institutional behavior. The reason is that microsociological and macrosociological theories require different approaches and conceptual schemes, and their distinct perspectives enrich each other. He shows that people's attitudes and actions are determined by exchanging gratitude and approval for intangible values like respect and money. He puts much emphasis on economic concepts especially the diminishing marginal returns that come from a colleague of higher position helping one lower on the totem pole. The lower one gains less and less help as he adds additional units of admiration. And the approval becomes less and less beneficial to the expert or higher up. The book covers such areas as voting behavior, intermarriage, group affiliations, friendship, compliance, employment, attraction, authority, competition, leadership, punishment, reciprocity, status, risk versus reward, trust– all in the context of exchanging tangible and intangible values in everyday life.

There are no tables and equations in the book. And the economic concepts used are very elementary and fuzzy. However, I found the book insightful in many areas and quite a nice perspective for thinking about markets.


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