We report new experiments that test quantum dynamical predictions of polarization squeezing for ultrashort photonic pulses in a birefringent fiber, including all relevant dissipative effects. This exponentially complex many-body problem is solved by means of a stochastic phase-space method. The squeezing is calculated and compared to experimental data, resulting in excellent quantitative agreement. From the simulations, we identify the physical limits to quantum noise reduction in optical fibers. The research represents a significant experimental test of first-principles time-domain quantum dynamics in a one-dimensional interacting Bose gas coupled to dissipative reservoirs.
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