We show theoretically that two atomic dipoles in a resonator constitute a non-linear medium, whose properties can be controlled through the relative position of the atoms inside the cavity and the detuning and intensity of the driving laser. We identify the parameter regime where the system operates as a parametric amplifier, based on the cascade emission of the collective dipole of the atoms, and determine the corresponding spectrum of squeezing of the field at the cavity output. This dynamics could be observed as a result of self-organization of laser-cooled atoms in resonators.
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