A labor market with heterogeneous firms and workers

A labor market where firms and workers are heterogeneous and may form more than one partnership is considered. A natural concept of core for such markets, different from the concept used by Thompson (1977), is defined. We show that the core is non-empty and is, in general, strictly greater than Thompson's core. Unlike Thompson, we found several dissimilarities between our model and the well known one-to-one case studied in Shapley and Shubik (1972). Received April 2001/Revised July 2002  This work was partially supported by FIPE-S?o Paulo and CNPq-Brazil.?I am in debt to David Gale and an anonymous referee and associate editor of IJGT whose comments and suggestions contributed for the improvement of this paper.