The Relational and Transactional Rationality: Exploring Eastern and Western Bases of Exchanges

Title

The Relational and Transactional Rationality: Exploring Eastern and Western Bases of Exchanges

Author

Nan LIN

Page

71-109

DOI

Abstract

In this essay, I explicate a theory of cultural identity based on exchanges. Exchanges have two components: economic transaction and social relations. Both are rational in that each involves deliberate decisions among choices. Economic transactions favor benefit over cost in gains in transactional trades; social relations favor benefit over cost in gains in social relations. Economic transactions accumulate to wealth—economic standing; social relations accumulate to reputation—social standing. In optimal situations, exchanges may promote both transactional and relational gains. However, through historical and experiential processes, the priority ranking between the two rationalities becomes institutionalized in a given society or community. In some societies (e.g., North America and Western Europe) transactional rationality has become dominant , while in others (e.g., East Asia) relational rationality has prevailed. Immersed in each institution, individuals in each institutional field acquire its value and resources as the focal identity. Thus their ideology and behaviors reflect the affinity and affirmation for wealth or reputation.

Keyword

Rationality, East-West comparisons, relations, transactions, exchange

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