The ghost interference observed for entangled photons is theoretically analyzed using wave-packet dynamics. It is shown that ghost interference is a combined effect of virtual double-slit creation due to entanglement, and quantum erasure of which-path information for the interfering photon. For the case where the two photons are of different color, it is shown that fringe width of the interfering photon depends not only on its own wavelength, but also on the wavelength of the other photon which it is entangled with.
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