Sharepoint - Dynamic view in Sharepoint list
SharePoint does not handle scenarios like these very well. As the name implies, SharePoint is meant for sharing, not for restricting access.
If your hierarchy is built with folders, you can achieve the permissions by creating groups for each folder and adding the group members for each group.
Since SharePoint groups cannot be nested, you can use AD security groups, which CAN be nested, to define the group members and use AD group names instead of individual people in the SharePoint groups.