The exchange theory is based upon the idea that people make a mental calculation (conscious or unconscious) that is used to determine the rewards and costs of making a commitment to a relationship.  According to this theory, a person considers the history of rewards received during an interaction with another person and weighs that against the history of costs; an estimate is then made determining the worth of the relationship.  Thus, when the rewards outweigh the costs, the relationship will most likely be continued; yet if the relationship is deemed too costly, it most likely will not be pursued.  Such an occurrence is often seen in the development of an intimate (nonsexual) relationship (LeFleur, 2005).

Example:

The popular tv sitcom The Office incorporates this idea of exchange theory.  Dunder-Mifflin Paper Company is a small business and therefore cannot afford to compete with the low prices of large corporations such as Staples.  To make up for this, they promise excellent customer service in order to attract and maintain a good number of customers.  Thus, those who need to buy paper must weight the cost and benefits between paper and price and quality customer service.