A study which shows that the fundamental problem of determining the usefulness of a noisy communication channel in conveying information can be interpreted as a problem within the framework of multistage decision processes of stochastic type. As such, the problem may be treated by means of the functional-equation technique of dynamic programming. Part I of this research memorandum formulates several aspects of the general problem in terms of stochastic multistage decision processes. Part II examines communication processes involving the use of channels, the statistical properties of which are not completely known. 42 pp.
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