The paper seeks to re-examine a classic piece of macromarketing scholarship which dealt with market failures. That analysis was based on a transactional approach to markets, rather than a systems approach. Having become more prominent in the macromarketing literature since that time, marketing systems are the focus of the present analysis. The paper looks at six types of market failure: imperfect competition, entry barriers, externalities, imperfect information, inequality, and transaction costs. Definitions, politics and political economy are discussed, as is a more systems-oriented approach to the assessment of market failures.

The US housing market involves a network of specialized actors servicing the buying and selling of homes. In the years leading to the housing bubble, this network underwent a significant evolution in response to environmental changes. Prior to the bubble, traditional actors such as local banks, savings and loans, Fannie Mae, and Freddie Mac predominated. During the bubble, new actors such as mortgage brokers, investment banks, and institutional investors came to displace the traditional ones. Attention is drawn to the activities of new players in the housing market, to the changed roles of traditional players, and to inactivity among regulators. This article presents an overview of system dynamics in terms of the market actors involved and their interrelationships, which culminated in the bursting of the housing bubble. Although many features of this case are unique, some general lessons for marketing systems can be drawn. Marketing systems can come to be dominated by actors formerly in supporting roles; new system structures can fail to serve customers well; and unfounded assumptions can cloud business and policy decisions.

When competing technologies are introduced at about the same time, they may either share the market for an extended period or one may eventually dominate the other. Using actual data from the VCR market, William Redmond explores product and market conditions that favor the emergence of a dominant technology. Recent developments in the theory of nonlinear economic processes yield straightforward models of the dominant or all‐or‐nothing response pattern. In this study, the role of externalities, or infrastructure, emerges as a critical determinant in producing the nonlinear market response pattern. One intriguing aspect of nonlinear market processes is a propensity for small, outside influences to exercise a powerful and long‐term influence on market response, that is, “luck” may play a role in these models.

This article deals with a possible future of e-commerce, not with how consumers or marketers currently shop on the Internet. In the future, artificial shopping agents may change e-commerce markets by significantly extending the search and evaluation capabilities of consumers. These agents have the potential to change current market relationships because they work on behalf of individual consumers, rather than offer advice to consumers on behalf of retailers. Additionally two types of shopping agents are possible, one of which may result in different patterns of choice than at present. The prospect of consumers relying on artificial agents for shopping decisions has raised concerns about negative impacts on both consumer welfare and the stability of markets. The article evaluates these concerns and concludes that major dislocations in consumer choice patterns are unlikely in the short run, but increasingly possible in the long run.

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