A guide to the very basics of Dixit-Stiglitz (updated)


A new semester is starting, and new students are encountering Dixit-Stiglitz monopolistic competition for the first time. I’ve updated my introductory guide to its basics by adding the step-by-step derivation of the indirect utility function (and hence the expenditure function).

Feedback from users (or teachers) is appreciated.

My original explanation of the guide is here.