Buyers and sellers have differing perspectives when it relates to fiduciary responsibilities and decision-making. The fiduciary responsibility of the buyer is buy the product or service at the lowest or most reasonable price, while the seller has the fiduciary responsibility of attempting to sell the product or service at the highest or best price. Analysis of the word fiduciary refers to “a relationship in which one person has a responsibility of care for the assets or rights of another person” (Murray, 2016). In business, the fiduciary relationship may be handled by many people such as a fiscal department, corporate board members, or even employees. Therefore, the fiduciary responsibilities of the buyer and seller differ and affect decision-making in order to act in the best interest of another person or business.
In economics, the term reciprocity is related to the concept of the fiduciary responsibilities through either pure economic gain or social gain of the buyer and seller. The concept of reciprocity occurs when there is a basis of cooperation (Johnson, 2015). The cooperation can be between the buyers and sellers in negotiation of the sell or even between friends and families. Reciprocity “typically results in a continuing sequence of giving, receiving, and repaying gifts” and “is a binding mechanism in that its continuance helps to hold friends and families together” (Palomar Education, 2008). Reciprocity tends to serve as a binding obligation between the parties involved to result in economic gain or social gain.
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"Fiduciary Responsibilities Effects on Decision-Making".
From the perspective of buyers and sellers, fiduciary responsibility is an important aspect of purchasing goods and services. Each party has the responsibility of caring for the parties they represent to get the best deal from the transaction and the fiduciary responsibility can cause a change in the decision-making related to the transaction. If the buyer simply decides to purchase based on price the fiduciary responsibility is related to cost savings; however, the buyer may decide to pay a higher rate if the value is better. Sellers have the responsibility to sell the product or service at the best price for their organization and the pricing decision could be effected by financial or social gain.
- Johnson, T. C. (2015). Reciprocity as a Foundation of Financial Economics. J Bus Ethics, 131(1), 43-67. doi:10.1007/s10551-014-2257-x
- Murray, J. (2016). What is a Fiduciary – Fiduciary Responsibility Explained – Fiduciary Defined. Retrieved from http://biztaxlaw.about.com/od/glossaryf/g/fiduciary.htm
- Palomar Education. (2008). Economic Systems: Distribution and Exchange. Retrieved from http://anthro.palomar.edu/economy/econ_3.htm
