The ultimate quantum limits on the accuracy of measurements

A quantum generalization of rate-distortion theory from standard communication and information theory is developed for application to determining the ultimate performance limit of measurement systems in physics. For the estimation of a real or a phase parameter, it is shown that the root-mean-square error obtained in a measurement with a single-mode photon level N cannot do better than approximately N exp -1, while approximately exp(-N) may be obtained for multi-mode fields with the same photon level N. Possible ways to achieve the remarkable exponential performance are indicated.