Social Transactions on Social Network Sites: Can Transaction Cost Theory Contribute to a Better Understanding of Internet Social Networking?

Social Network Sites (SNSs) are a success story by example. User counts as well as page visits have rocketed in recent years. In this paper we propose to utilize Transaction Cost Theory (TCT) and Social Capital Theory (SCT) to make sense of what kind of social interaction is executed on SNSs and why. In doing so we will show how TCT can be applied to SNSs by proposing to include in the theory the construct of social transactions. We will describe the characteristics of social transactions on SNSs as being concerned with the management of Social Capital. We will then determine which social transactions are attracted by SNSs. Finally, wwe discuss how research in the field of Internet Social Networking can benefit from this conceptualisation of social transactions and spell out practical implications.