A cooperative game with transferable utility (TU game) captures a situation in which players can achieve certain payoffs by cooperating. We assume that the players are part of a hierarchy. In the literature, this invokes the assumption that subordinates cannot cooperate without the permission of their superiors. Instead, we assume that superiors can force their subordinates to cooperate. We show how both notions correspond to each other by means of dual TU games. This way, we capture the idea that a superiors’ ability to enforce cooperation can be seen as the ability to neutralize her subordinate’s threat to abstain from cooperation. Moreover, we introduce the coercion value for games with a hierarchy and provide characterizations thereof that reveal the similarity to the permission value.
A polynomial time algorithm for computing the nucleolus for a class of disjunctive games with a permission structure