On Hierarchies and Communication

Many economic and political organizations have some relational structure, meaning that participating agents do not only differ with respect to certain individual characteristics such as wealth and preferences, but also belong to some relational structure in which they usually take different positions. Two examples of such structures are communication networks and hierarchies. In the literature, the distinction between these two types of relational structures is not always clear. In models of restricted cooperation, this distinction should be defined by properties of the set of feasible coalitions. We characterize the sets of feasible coalitions in communication networks and compare them with sets of feasible coalitions arising from hierarchies. © 2011 The Author(s).