The recently developed technique of arithmetic coding, in conjunction with a Markov model of the source, is a powerful method of data compression in situations where a linear treatment is inappropriate. Adaptive coding allows the model to be constructed dynamically by both encoder and decoder during the course of the transmission, and has been shown to incur a smaller coding overhead than explicit transmission of the model's statistics. But there is a basic conflict between the desire to use high-order Markov models and the need to have them formed quickly as the initial part of the message is sent. This paper describes how the conflict can be resolved with partial string matching, and reports experimental results which show that mixed-case English text can be coded in as little as 2.2 bits/ character with no prior knowledge of the source.
Cleary et al. (1984) studied this question.