This question is rather old, but I think an answer may help some people.
I understand that you mean by this 5 points in three dimensions.
You say "the divisive hierarchical clustering algorithm". I am
going to assume that you want the DIANA algorithm
(Kaufman, L.; Rousseeuw, P.J. (1990) Finding Groups in Data:
An Introduction to Cluster Analysis).
As you said, we start with all points in a single cluster.
At each step, we will split the largest cluster (the one with the
largest diameter) into two pieces.
To divide the data, we start by finding the single point which is
the most dissimilar to the rest of the cluster. Then we successively
move points to the new cluster if they are more similar to the new
cluster than the old one As you noted in your question, that requires
that we have a method for computing the distance from a point to a
group of points. The method used in DIANA is the average of all the
distances from the point to the points in the group. Throughout the
process, we need the distance matrix.
1 2 3 4 5
1 0 4 4 5 7
2 4 0 4 3 3
3 4 4 0 5 7
4 5 3 5 0 2
5 7 3 7 2 0
The top level cluster is all points {1,2,3,4,5}.
Which point is most dissimilar? As you noted, we take the average
distance to the other points. So, just for example, for point 1
we compute
[ d(1,2) + d(1,3) + d(1,4) + d(1,5) ] / 4
= (4 + 4 + 5 + 7) / 4 = 5
The average distances for all points are:
1 2 3 4 5
5.00 3.50 5.00 3.75 4.75
Since points 1 and 3 are tied for the most dissimilar, we pick one
of these arbitrarily. I will use point 1. Using your notation,
we have A = {2,3,4,5} and B = {1}
Now we want to move any points that are closer to B than
(the other points in) A into B. So for each point x in A
we compute d(x, A-x) and d(x,B). For example, for point 2 we compute
[ d(2,3) + d(2,4) + d(2,5) ] / 3 - d(2,1)
= 10/3 - 4 = -2/3
All of the differences are:
2 3 4 5
-2/3 4/3 -5/3 -3
Only point 3 is bigger than zero so we move it to cluster B.
We now have A = {2,4,5} B = {1,3}
We check if any additional points should be moved. Again, we compute
d(x, A-x) - d(x,B) for each point in A. The differences are:
2 4 5
-1.0 -2.5 -4.5
All are negative (that is the remaining points in A are closer to A than to B),
so we stop this division and we have the two clusters {2,4,5} and {1,3}.
For the next step, we choose the cluster with the largest diameter, that is the
cluster with the greatest distance between two points in the cluster.
diameter({1,3}) = d(1,3) = 4
diameter({2,4,5}) = max(d(2,4), d(2,5), d(4,5))
= max(3, 3, 2) = 3
So cluster {1,3} has the largest diameter.
Trivially, this will be split into {1} and {3}.
So now we have clusters {2,4,5}, {1} and {3}.
At the next step, we must split the cluster {2,4,5}. As above,
for each point we will find the point with the largest average distance
to the rest of the points. For example we compute
point 2: [d(2,4) + d(2,5)] / 2 = [3+3]/2 = 3
The other averages are point 4: 5/2 and point 5: 5/2, so point 2 is the most
dissimilar. We split {2,4,5} into A={4,5} and B={2}. We need to check if
some additional points should be moved into the set B.
d(4,5) - d(4,2} = 2-3 = -1
d(5,4) - d(5,2} = 2-3 = -1
So no additional points should be moved.
We split {2,4,5} into {2} and {4,5} giving us the partition of the full
data set {1}, {2}, {3}, {4,5}
Finally, we divide the last cluster to get {1} {2} {3} {4} {5}
Thus, the full hierarchy looks like this: