To “ Market Structure and Multiple Equilibria in Airline Markets ”

We first describe the simulation procedure. Then we give theorems that are used in the main text. We also include many of the practical details that are used to implement the estimation procedure. WE SIMULATE the functions H 1 (X θ) and H 2 (X θ) for a given X and θ as follows. Set H 1 (X θ) = H 2 (X θ) = 0. Moreover, for every market, generate and store R draws from the distribution F with identity variance–covariance matrix. The number of simulations is assumed to go to infinity with sample size. More on this below. For each simulation r = (1 R), follow Steps 1–3: STEP 1: Transform the given matrix of epsilon draws into a draw with covari-ance matrix specified in θ. This is stored in r .