This paper studies the capacity and error performance of a noncoherent index-modulated orthogonal frequency division multiplexing (OFDM-IM) system with binary coded subcarrier activation patterns. To that end, soft-decision (i.e., unquantized) and hard-decision (i.e., quantized) channels are considered, where the latter is equivalent to a binary asymmetric channel (BAC). By using maximum likelihood and maximum a posteriori criteria, crossover probabilities of the quantized channel are derived in order to characterize its capacity and probability of error in detecting IM signals. Capacity expressions are then given for both channels. Using the Blahut-Arimoto algorithm, an iterative algorithm is developed to find the optimal input distribution for the unquantized channel, while for the quantized channel, it is found by solving a nonlinear equation for its zero. It is shown that using a uniform input distribution instead of the optimal (nonuniform) one results in a negligible capacity loss, therefore binary codes with a uniform distribution of 1s and 0s are nearly optimal. Compared to the unquantized channel, it is shown that an approximate loss less than 2dB is incurred when quantization is used and this loss diminishes rapidly as signal-to-noise ratio (SNR) increases. In addition, it is demonstrated that the gap (in dB) between uncoded noncoherent OFDM-IM system and the capacity limit is generally wide, and the gap narrows when subcarrier clustering is considered. The findings in this paper can have theoretical and practical significance for understanding capacity limits and can provide some guidance for coding design in noncoherent OFDM-IM systems.
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