The problem of estimating the number of states of a finite-alphabet, finite-state source is investigated. An estimator is developed that asymptotically attains the minimum probability of understanding the number of states, among all estimators with a prescribed exponential decay rate of overestimation probability. The proposed estimator relies on the Lempel-Ziv data compression algorithm in an intuitively appealing manner.>
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Ziv et al. (1992) studied this question.
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