Equity Theory

Equity theory, which relies on the act of interaction, is an important and widely used theory for explaining organizational relationships. It rests on three fundamental components: contribution, gain, and reference. It offers a framework for understanding how people assess the fairness of their relationships with others in terms of their own gains and contributions in comparison to those of others. As a result, it has become widely used in tourism literature, particularly to explain the formation of intraorganizational relationships. Furthermore, recent studies indicate that the theory is well suited to examining customer behaviors as well as the relationships between locals and tourists. This chapter delves deeply into the theory’s origins and assumptions. Moreover, its applications in tourism and hospitality literature are thoroughly discussed.