Abstract
A continuous quantum-nondemolition measurement scheme that is based on intensity dependent atomic scattering in three-state systems is analyzed. The proposed scheme measures the number of photons in an optical cavity mode by observing the scattering rate of the atomic medium. The time evolution of the coupled atom-field system is analyzed using the Monte Carlo wave-function approach. The wave-function collapse occurs continuously as a result of the presence or absence of scattering events at each time instant. It is shown that the measurement is logically reversible and the information contained in the premeasurement wave function is preserved during the measurement interaction.