A labor market with heterogeneous firms and workers

Abstract.

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).