Two-level cooperation in a class of non-zero-sum differential games

A two-level game is considered. At the first level, the set of players $N$ is partitioned into coalitions $S_i\subset N$, $i=1,\ldots,m$, such that $S_i\cap S_j=\varnothing$ for $i\neq j$ and each coalition plays against other coalitions a non-zero-sum cooperative differential game with prescribed duration and nontransferable payoffs. At the second level, within each coalition, the players are engaged in a cooperative differential game with prescribed duration and transferrable payoffs. The concept of solution is proposed for this type of two-level games. The properties of a solution, namely, its time consistency or dynamic stability, are studied.