A new entropy-constrained motion estimation scheme using variable-size block matching is proposed. It is known that fixed-size block matching as used in most video codec standards is improved by using a multi-grid approach. In this work it is shown that further improvement is possible in terms of both the final bit rate and the robustness of the predicted motion field if perceptual coding is taken into account in the motion estimation stage. The proposed scheme is compared against other variable- and fixed-size block matching algorithms.
 

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