When you are in power, you have the option to harm others. You also have the opportunity to show mercy. When I feed birds in the winter, I show mercy. When I offer a fair price to a desperate merchant, I show mercy. When I refrain from seducing a married man, I show mercy. Being merciful means that you have boundaries in the degree to which you value getting the best deal for yourself. It is the recognition that the life and happiness of others is valuable to you.
Mercy and dignity civilise the game of power, but both exist at the mercy of power. When you are powerless, you have no control over your actions and those of others. You can be subjected to most degrading acts and be forced to commit the vilest crimes to others. Power is the root from which mercy and dignity flower. There are always situations where you have more, or less power then the other. Dignity prompts you to avoid being used without mercy when you are the less powerful party. It requires at least the power to walk away when someone attempts to treat you without mercy. Naturally, mercy can only be exercised when you are the more powerful party. It does require you to have the option to take less than the best deal and still survive. If you are hungry and need bread, but only have a dollar, you cannot afford a $2 bread. Even if the $1 bread is made by small children who lead wretched lives and the $2 bread is made by people paid a fair wage.
Power gives you the option to choose the latter bread and survive to do so every day. Mercy is not only a proof of your power in the world, but also shows how much power you have over your own needs and drives. If you have such a desperate need for attention and affection that you seduce a married man to feel desirable, knowing his wife and children suffer, you are either a slave to your needs, lack empathy or both. The same desperate need could cause the same woman to sacrifice her dignity by accepting the role of mistress when she would rather be a wife or marketing herself in a degrading way. Or take a man with a drug addiction who will rob his own mother or prostitute himself to meet his boundless need. Or a politician who has a desperate need to control others and feel powerful, who destroys his country to stay in power and commits suicide when he cannot. Mercy is a hallmark of true power.