Differential encoding incurs a bit error penalty because received code symbols influence more than one decoded bit. First consider a single symbol detection error in current symbol E’ which is labeled k. The following sequence of decoding steps shows how the error propagates. Since the E channel was chosen as current, decoding starts with equation (M-4a). The single detection error creates two sequential decoding errors. By symmetry we can state that the same result occurs if a single error occurs in O’.
Next is the case of two symbol detection errors occurring consecutively on E’ and O’, i.e., detectors emit error symbols E’k=k and O’k+1=k+1. Starting again with equation (M-4a) yields:
Two consecutive symbol errors produce two decoding errors but the errors are not adjacent. The conclusion from this is that symbol detection errors influence no more than two decoding cycles, i.e., the maximum error multiplication factor is 2.
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