Exchange Theory Case Study

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I. INTRODUCTION “International practice shows the increasing importance of umpire courts and international courts of arbitration in social and political life of individual countries, both the most advanced ones and those that are only striving for prosperity, as well as the international community as a whole.”1 American International Commercial Arbitration Court A. Objectives / Purpose of the Study Republic Act No. 876, othewise known as “The Arbitration Law” was approved on June 19, 1953 and took effect six months after.2 More than fifty years later, the Philippine Congress passed Republic Act No. 9285, otherwise known as “Alternative Dispute Resolution Act of 2004”.3 Unfortunately, arbitration, as a viable alternative to court litigation, is still in its infancy even after more than 100 years of being a viable option as provided by the Supreme…show more content…
However, if such presumption is negated, then an individual would choose the option which is more rational depending on a set of criterion provided. Exchange Theory Exchange Theory “seeks to explain human interactions through the dynamics of rewards and benefits.15” This theory evolved from a combination of psychology, anthrophology and economic theories which tried to explain human interaction. From this, two branches of exchange theory was created; social exchange and economic exchange. For the purpose of this study, economic exchange shall be the utilized as the guide for its framework. At the core of this theory, is the concept of profit. Profit, in this case, can be defined as “benefits(rewards) less costs”16. Benefits can be conceptualized in the terms of material or symbolic gains such that would bring value or satisfaction to an individual17. Costs, on the other hand, can be perceived as punishment or rewards foregone because a competing alternative was
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