On the Wyner-Ziv problem for individual sequences

We consider a variation of the Wyner-Ziv (W-Z) problem pertaining to lossy compression of individual sequences using finite-state encoders and decoders. There are two main results in this paper. The first characterizes the relationship between the performance of the best M-state encoder-decoder pair to that of the best block code of size lscr for every input sequence, and shows that the loss of the latter relative to the former (in terms of both rate and distortion) never exceeds the order of (logM)/lscr, independently of the input sequence. Thus, in the limit of large M, the best rate-distortion performance of every infinite source sequence can be approached universally by a sequence of block codes (which are also implementable by finite-state machines). While this result assumes an asymptotic regime where the number of states is fixed, and only the length n of the input sequence grows without bound, we then consider the case where the number of states M=M
_n
is allowed to grow concurrently with n. Our second result is then about the critical growth rate of M
_n
such that the rate-distortion performance of M
_n
-state encoder-decoder pairs can still be matched by a universal code. We show that this critical growth rate of M
_n
is linear in n