Steinbeck handles exposition in an unusual way because of special circumstances connected with this particular project. As explained in the eNotes Introduction in the Study Guide, he intended to turn the novella into a stage play, and he must have had an agreement with his collaborator George Kaufman to write the play and produce it as quickly as possible. Both the book and the play came out in 1937.
In a stage play, as in a movie, much of the exposition is conveyed to the audience through dialogue. The characters are speaking to each other, but at the same time their dialogue is freighted with details of the who, what, where, when, why, and how that are essential for the audience to know. A good example of how Steinbeck uses dialogue for exposition is the following from the first chapter:
"Jus' wanted to feel that girl's dress--jus' wanted to pet it like it was a mouse-- Well, how the hell did she know you jus' wanted to feel her dress? She jerks back and you hold on like it was a mouse. She yells and we got to hide in a irrigation ditch all day with guys lookin' for us, and we got to sneak out in the dark and get outta the country. All the time somethin' like that--all the time."
This dialogue could be taken straight out of the book and put into the play, as is the case with so much of the dialogue throughout the book.
California was not an important state in the Depression era. That began to change with World War II. Steinbeck was not a well-known writer, and he would have been classified as a "regional writer." He was probably anxious to get his message about the hardships of agricultural workers to the East Coast, which was the intellectual, political, and economic heart of America. That explains why Of Mice and Men is so short. It is just long enough to be made into a play, but it is usually referred to as a novella rather than a novel. It consists of only six chapters, and the settings are minimalistic. Almost all the action takes place in the bunkhouse, the barn, or in Curley's little room adjacent to the barn. Obviously this would have made it easy and economical to produce on stage.
A novel about life on a big California ranch would seem to call for scenes of men working out in the fields with the big teams of horses. Steinbeck does not incorporate such scenes into his novella because it would be impossible to show them on a stage. However, when the book was adapted to the motion picture screen it was a different matter. Both the movie versions have panoramic outdoor scenery to "open up" the rather cloistered story.
In the novella Steinbeck only uses straight prose exposition when it is unavoidable. His descriptions of characters and their actions are not exposition but are comparable to stage directions in a play. The reference links below lead to interesting discussions of the relationship between the novella and its adaptations to stage and screen.