Table 2. Symbols.

Symbols	Connotation
w 1	Wholesale price
p1,p2	Unit selling prices in both channels
d1,d2	Demand from both channels
$d_1^N$	Demand for channel 1 at the time of the no-encroachment
$d_1^E$	Demand for channel 1 at the time of the encroachment
c0,c1,c2,c3	Transport costs at various points, c>0
b	Intensity of competition between channels, 1>b>0
a	Latent market demand
a 0	Fixed portion of potential market demand
f	Market signal
ϑ	Variable portion of potential demand
ν	Variance of uncertainty component
ε	Error component of market signals
s	Variance of the error component
A	Forecasting demand