Coalitional manipulation on hierarchies

Abstract

We consider the problem of allocating revenues that are generated on a hierarchy. We investigate allocation rules that prevent coalitional manipulation by reallocating revenues among agents in a coalition. The formation of a coalition is restricted by the hierarchical structure

coalitional reallocation is feasible when the coalition is connected and includes the boss at the top of the hierarchy. We characterize a family of reallocation-proof rules, which are called generalized transfer rules. Under a generalized transfer rule, each agent takes a fixed fraction of her revenue and pays the rest to her superior. We also offer characterizations of some specific rules in the family.