Lecture 07 · Entanglement

Density Matrices & Entanglement Entropy

Mixed states, the density matrix formalism, partial traces, reduced density matrices, von Neumann entropy, and the deep connection between entanglement and entropy.

Part I — The Need for Density Matrices

In quantum mechanics, a pure state is described by a single state vector $|\psi\rangle$ — it represents maximal information about the system. But in practice, we often have incomplete information. A mixed state arises when we have a statistical ensemble of pure states: we know the system is in one of several states $|\psi_i\rangle$, each with classical probability $p_i$, but we don't know which one.

There are two fundamentally distinct reasons a system may be in a mixed state:

  1. Classical ignorance: imperfect preparation — the lab equipment doesn't reliably put every electron into the same state.
  2. Quantum entanglement: the system is entangled with another system (say, Bob's) whose state we don't control or measure.

The density matrix $\rho$ captures both types of ignorance in a single unified formalism. For a pure state $|\psi\rangle$, the density matrix is defined as the outer product:

Pure State Density Matrix
$$\rho = |\psi\rangle\langle\psi|$$

This is a rank-1 matrix — a projector onto the state $|\psi\rangle$. For a classical mixture with probabilities $p_i$ and pure states $|\psi_i\rangle$, the density matrix is the convex combination:

$$\rho = \sum_i p_i |\psi_i\rangle\langle\psi_i|, \qquad p_i \geq 0, \quad \sum_i p_i = 1$$

Part II — Properties of the Density Matrix

The density matrix satisfies three fundamental properties that follow directly from its definition:

PropertyStatementWhy?
Hermitian$\rho = \rho^\dagger$Each $|\psi_i\rangle\langle\psi_i|$ is Hermitian, sum of Hermitians is Hermitian
Positive semi-definite$\langle\phi|\rho|\phi\rangle \geq 0$ for all $|\phi\rangle$Follows from $p_i \geq 0$ and $|\langle\phi|\psi_i\rangle|^2 \geq 0$
Unit trace$\mathrm{Tr}(\rho) = 1$Probabilities sum to 1

Beyond these, the density matrix carries a powerful diagnostic for purity. For a pure state, $\rho^2 = \rho$ (it is idempotent), so $\mathrm{Tr}(\rho^2) = 1$. For any mixed state, $\mathrm{Tr}(\rho^2) < 1$. The maximally mixed state for an $N$-dimensional system is $\rho = I/N$ — it encodes zero information about the state.

The expectation value of any observable $A$ is computed simply as:

Expectation Value
$$\langle A \rangle = \mathrm{Tr}(\rho A)$$

Part III — Partial Trace and Reduced Density Matrix

Consider a composite system $AB$ with joint state $\rho_{AB}$. Alice has access only to subsystem $A$. Her reduced density matrix is obtained by tracing out Bob's degrees of freedom:

$$\rho_A = \mathrm{Tr}_B(\rho_{AB})$$

The partial trace is defined on basis elements by:

$$\mathrm{Tr}_B(|a_1 b_1\rangle\langle a_2 b_2|) = |a_1\rangle\langle a_2| \cdot \langle b_2 | b_1\rangle = \delta_{b_1 b_2}\, |a_1\rangle\langle a_2|$$

This is the only operation that correctly describes Alice's local measurements when she has no access to Bob's system. Consider the singlet state $|\mathrm{sing}\rangle = \tfrac{1}{\sqrt{2}}(|ud\rangle - |du\rangle)$. Its density matrix is:

$$\rho_{AB} = |\mathrm{sing}\rangle\langle\mathrm{sing}| = \frac{1}{2}\bigl(|ud\rangle\langle ud| + |du\rangle\langle du| - |ud\rangle\langle du| - |du\rangle\langle ud|\bigr)$$

Taking the partial trace over $B$:

$$\rho_A = \mathrm{Tr}_B(\rho_{AB}) = \frac{1}{2}\bigl(|u\rangle\langle u| + |d\rangle\langle d|\bigr) = \frac{I}{2}$$

Alice's reduced state is the maximally mixed state — even though the composite state $\rho_{AB}$ is pure! This is one of the most striking features of quantum entanglement: a subsystem of a pure entangled state can have maximal uncertainty.

Part IV — Entanglement Entropy

How much entanglement does a bipartite pure state contain? The answer is quantified by the von Neumann entropy:

Von Neumann Entropy
$$S(\rho) = -\mathrm{Tr}(\rho \log \rho) = -\sum_i \lambda_i \log \lambda_i$$

where $\lambda_i$ are the eigenvalues of $\rho$ and we use the convention $0 \cdot \log 0 = 0$. Key benchmark values:

  • Pure state: eigenvalues are $\{1, 0, 0, \ldots\}$, so $S = -1\cdot\log 1 = 0$.
  • Maximally mixed state: $\rho = I/N$ has all eigenvalues $1/N$, giving $S(I/N) = \log N$.

For a bipartite pure state $|\psi\rangle_{AB}$, the entanglement entropy of subsystem $A$ is:

$$S_E = S(\rho_A) = -\mathrm{Tr}(\rho_A \log \rho_A)$$

For the singlet: $\rho_A = I/2$ has eigenvalues $1/2, 1/2$, giving:

$$S_E = -2 \cdot \frac{1}{2}\log\frac{1}{2} = \log 2 = 1 \text{ ebit} \quad\text{(maximum for 1 qubit)}$$

For a product state $|\psi\rangle = |\alpha\rangle_A \otimes |\beta\rangle_B$: $\rho_A$ is a pure state, so $S_E = 0$ — no entanglement.

Part V — The Measurement Chain (Von Neumann)

Quantum mechanics raises a profound question: where does the collapse happen? Von Neumann analyzed the measurement process as a chain of interactions:

$$\text{spin} \to \text{detector} \to \text{pointer} \to \text{eye} \to \text{brain} \to \text{consciousness}$$

At each stage, the quantum system entangles with the next object in the chain. From the perspective of an outside observer, the entire chain is in a superposition — like Schrödinger's cat. The remarkable result is that the physical predictions are independent of where you "cut" the chain. The reduced density matrix of the measured system, at any cut point, becomes diagonal in the eigenbasis of the measured observable — the off-diagonal coherences vanish.

This is decoherence: from the perspective of a local observer, quantum interference terms (off-diagonal elements) disappear because they are encoded in correlations with an inaccessible environment. The system appears to be in a classical mixture, even though the global state remains pure.

Part VI — Pure States From Entanglement

We encounter an apparent paradox: the joint state of Alice and Bob is pure (zero entropy), yet Alice's reduced state is maximally mixed (maximum entropy). How is this possible?

This is only possible through entanglement. Classical correlations cannot increase local entropy while keeping global entropy zero. The key theorem is:

Theorem: For a pure bipartite state $|\psi\rangle_{AB}$, the subsystems have equal entanglement entropy: $S(\rho_A) = S(\rho_B)$.

This is why the singlet is called "maximally entangled": Alice and Bob each have maximum uncertainty about their own subsystem (their local states are $I/2$), yet together they are in a perfectly definite pure state. All the information is encoded in the correlations between the subsystems, not in either subsystem alone.

Part VII — Distinguishing Pure from Mixed States

Three equivalent methods to determine whether a given $\rho$ is pure or mixed:

Method 1 — Purity: Compute $\mathrm{Tr}(\rho^2)$. Pure $\Leftrightarrow \mathrm{Tr}(\rho^2) = 1$. Mixed $\Leftrightarrow \mathrm{Tr}(\rho^2) < 1$.

Method 2 — Eigenvalues: All eigenvalues $\lambda_i \geq 0$ sum to 1. Pure $\Leftrightarrow$ one eigenvalue equals 1, the rest 0. Mixed $\Leftrightarrow$ more than one nonzero eigenvalue.

Method 3 — Entropy: $S(\rho) = 0$ if and only if $\rho$ is pure.

A concrete comparison illustrating a crucial physical difference:

StateMatrix$\mathrm{Tr}(\rho^2)$Type$\rho_{ud}$
$|\psi\rangle = \tfrac{1}{\sqrt{2}}(|u\rangle+|d\rangle)$$\tfrac{1}{2}\begin{pmatrix}1&1\\1&1\end{pmatrix}$$1$Pure$1/2 \neq 0$
$\rho = I/2$$\tfrac{1}{2}\begin{pmatrix}1&0\\0&1\end{pmatrix}$$1/2$Mixed$0$

These two states give identical probabilities for $\sigma_z$ measurements (both give 50/50), but the pure state has nonzero off-diagonal coherences — it will give different predictions for $\sigma_x$ measurements. They are physically distinguishable.

Exercises — Lecture 7

Nine exercises covering density matrices, partial traces, entanglement entropy, and decoherence. Click any exercise to reveal the full worked solution.

1
Pure State Density Matrix
EasyDensity Matrix

For $|\psi\rangle = \dfrac{1}{\sqrt{2}}(|u\rangle + |d\rangle) = |r\rangle$, compute $\rho = |\psi\rangle\langle\psi|$ as an explicit $2\times 2$ matrix.

(a) Verify $\mathrm{Tr}(\rho) = 1$.

(b) Verify $\mathrm{Tr}(\rho^2) = 1$, confirming this is a pure state.

Complete Solution
setup

The state vector is $|\psi\rangle = \dfrac{1}{\sqrt{2}}\begin{pmatrix}1\\1\end{pmatrix}$. The bra is the conjugate transpose: $\langle\psi| = \dfrac{1}{\sqrt{2}}\begin{pmatrix}1 & 1\end{pmatrix}$. The density matrix is:

$$\rho = |\psi\rangle\langle\psi| = \frac{1}{\sqrt{2}}\begin{pmatrix}1\\1\end{pmatrix}\cdot\frac{1}{\sqrt{2}}\begin{pmatrix}1&1\end{pmatrix} = \frac{1}{2}\begin{pmatrix}1&1\\1&1\end{pmatrix}$$
a

The trace is the sum of diagonal elements:

$$\mathrm{Tr}(\rho) = \frac{1}{2}(1 + 1) = 1 \checkmark$$
b

Compute $\rho^2$:

$$\rho^2 = \frac{1}{4}\begin{pmatrix}1&1\\1&1\end{pmatrix}^2 = \frac{1}{4}\begin{pmatrix}2&2\\2&2\end{pmatrix} = \frac{1}{2}\begin{pmatrix}1&1\\1&1\end{pmatrix} = \rho$$
Result
$\mathrm{Tr}(\rho^2) = \mathrm{Tr}(\rho) = 1$ ✓. The density matrix is idempotent ($\rho^2 = \rho$), confirming this is a pure state. Off-diagonal element $\rho_{ud} = 1/2 \neq 0$ — the coherences are present.
2
Expectation Value from Density Matrix
EasyTrace Formula

A mixed state has density matrix $\rho = \mathrm{diag}(3/4,\, 1/4)$.

(a) Compute $\langle\sigma_z\rangle = \mathrm{Tr}(\rho\, \sigma_z)$ where $\sigma_z = \mathrm{diag}(1,-1)$.

(b) Verify by computing the weighted average directly: $\langle\sigma_z\rangle = (3/4)(+1) + (1/4)(-1)$.

Complete Solution
a

Multiply the diagonal matrices and take the trace:

$$\rho\,\sigma_z = \begin{pmatrix}3/4&0\\0&1/4\end{pmatrix}\begin{pmatrix}1&0\\0&-1\end{pmatrix} = \begin{pmatrix}3/4&0\\0&-1/4\end{pmatrix}$$
$$\langle\sigma_z\rangle = \mathrm{Tr}(\rho\,\sigma_z) = \frac{3}{4} - \frac{1}{4} = \frac{1}{2}$$
b

The diagonal elements of $\rho$ are the probabilities $p_u = 3/4$ and $p_d = 1/4$:

$$\langle\sigma_z\rangle = \frac{3}{4}(+1) + \frac{1}{4}(-1) = \frac{3}{4} - \frac{1}{4} = \frac{1}{2} \checkmark$$
Answer
$\langle\sigma_z\rangle = 1/2$. Both methods agree, as they must.
3
Reduced Density Matrix
MediumPartial Trace

For the Bell state $|\Phi^+\rangle = \dfrac{1}{\sqrt{2}}(|uu\rangle + |dd\rangle)$, compute the reduced density matrix $\rho_A = \mathrm{Tr}_B(|\Phi^+\rangle\langle\Phi^+|)$ by applying the partial trace over $B$.

Complete Solution
expand

The joint density matrix is:

$$\rho_{AB} = |\Phi^+\rangle\langle\Phi^+| = \frac{1}{2}\bigl(|uu\rangle\langle uu| + |uu\rangle\langle dd| + |dd\rangle\langle uu| + |dd\rangle\langle dd|\bigr)$$
trace

Apply $\mathrm{Tr}_B$ using $\mathrm{Tr}_B(|ab\rangle\langle a'b'|) = |a\rangle\langle a'|\langle b'|b\rangle$:

$$\mathrm{Tr}_B(|uu\rangle\langle uu|) = |u\rangle\langle u|\langle u|u\rangle = |u\rangle\langle u|$$
$$\mathrm{Tr}_B(|dd\rangle\langle dd|) = |d\rangle\langle d|\langle d|d\rangle = |d\rangle\langle d|$$
$$\mathrm{Tr}_B(|uu\rangle\langle dd|) = |u\rangle\langle d|\langle u|d\rangle = 0 \quad (\text{since }\langle u|d\rangle = 0)$$
$$\mathrm{Tr}_B(|dd\rangle\langle uu|) = |d\rangle\langle u|\langle d|u\rangle = 0$$
result
Answer
$$\rho_A = \frac{1}{2}\bigl(|u\rangle\langle u| + |d\rangle\langle d|\bigr) = \frac{I}{2}$$ Alice's reduced state is maximally mixed — identical to the singlet result. All Bell states give the same reduced density matrix $I/2$. Maximum entanglement means maximum local ignorance.
4
Von Neumann Entropy
MediumEntropy

Compute $S(\rho) = -\sum_i \lambda_i \log \lambda_i$ (using $0\cdot\log 0 = 0$) for each density matrix:

(a) $\rho = \mathrm{diag}(1, 0)$ — a pure state.

(b) $\rho = \mathrm{diag}(1/2, 1/2)$ — the maximally mixed qubit.

(c) $\rho = \mathrm{diag}(3/4, 1/4)$ — a generic mixed state.

Complete Solution
a

Eigenvalues: $\lambda_1 = 1$, $\lambda_2 = 0$.

$$S = -(1)\log(1) - (0)\log(0) = 0 - 0 = 0$$

Pure state $\Rightarrow$ zero entropy. ✓

b

Eigenvalues: $\lambda_1 = \lambda_2 = 1/2$.

$$S = -2\cdot\frac{1}{2}\log\frac{1}{2} = -\log\frac{1}{2} = \log 2 = 1 \text{ bit (ebit)}$$

Maximum entropy for a qubit — maximally mixed. ✓

c

Eigenvalues: $\lambda_1 = 3/4$, $\lambda_2 = 1/4$. Using $\log_2$:

$$S = -\frac{3}{4}\log_2\frac{3}{4} - \frac{1}{4}\log_2\frac{1}{4} = \frac{3}{4}\log_2\frac{4}{3} + \frac{1}{4}\cdot 2$$
$$= \frac{3}{4}(0.415) + 0.5 \approx 0.311 + 0.5 = 0.811 \text{ bits}$$
Summary
$S = 0$ (pure), $S = 1$ bit (maximally mixed), $S \approx 0.811$ bits (generic). Entropy always satisfies $0 \leq S \leq \log N$.
5
Mixed vs Pure State Test
MediumPurity

Consider $\rho_1 = \tfrac{1}{2}\begin{pmatrix}1&1\\1&1\end{pmatrix}$ and $\rho_2 = \tfrac{1}{2}\begin{pmatrix}1&0\\0&1\end{pmatrix} = I/2$.

(a) Show $\rho_1$ is pure and $\rho_2$ is mixed using the $\mathrm{Tr}(\rho^2)$ test.

(b) Find the eigenvalues of each.

(c) Compute $S(\rho_1)$ and $S(\rho_2)$.

Complete Solution
a

For $\rho_1$:

$$\rho_1^2 = \frac{1}{4}\begin{pmatrix}1&1\\1&1\end{pmatrix}^2 = \frac{1}{4}\begin{pmatrix}2&2\\2&2\end{pmatrix} = \frac{1}{2}\begin{pmatrix}1&1\\1&1\end{pmatrix} = \rho_1$$

$\mathrm{Tr}(\rho_1^2) = \mathrm{Tr}(\rho_1) = 1$ → pure. ✓

For $\rho_2 = I/2$:

$$\rho_2^2 = \frac{1}{4}I, \qquad \mathrm{Tr}(\rho_2^2) = \frac{1}{2} < 1 \quad\Rightarrow\quad \textbf{mixed} \checkmark$$
b

$\rho_1$ is rank-1 (outer product of a normalized vector) → eigenvalues: $1, 0$.

$\rho_2 = I/2$ is proportional to identity → eigenvalues: $1/2, 1/2$.

c
Answer
$S(\rho_1) = 0$ (pure state). $S(\rho_2) = \log 2 = 1$ ebit (maximally mixed). These two states are physically different: $\rho_1$ has $\langle\sigma_x\rangle = 1$ while $\rho_2$ has $\langle\sigma_x\rangle = 0$.
6
Coherence and Off-Diagonal Elements
MediumConceptual

The off-diagonal elements of $\rho$ in the $\{|u\rangle, |d\rangle\}$ basis represent quantum coherence.

(a) For $|\psi\rangle = \tfrac{1}{\sqrt{2}}(|u\rangle + |d\rangle)$, compute $\rho$ and show $\rho_{ud} \neq 0$.

(b) For $\rho = I/2$, show $\rho_{ud} = 0$.

(c) Compute $\langle\sigma_x\rangle = \mathrm{Tr}(\rho\,\sigma_x)$ for both states. Can $\sigma_x$ distinguish them?

Complete Solution
a
$$\rho = \frac{1}{2}\begin{pmatrix}1&1\\1&1\end{pmatrix}, \qquad \rho_{ud} = \frac{1}{2} \neq 0 \checkmark$$
b
$$\rho = \frac{I}{2} = \frac{1}{2}\begin{pmatrix}1&0\\0&1\end{pmatrix}, \qquad \rho_{ud} = 0 \checkmark$$
c

With $\sigma_x = \begin{pmatrix}0&1\\1&0\end{pmatrix}$:

$$\text{Pure state: }\langle\sigma_x\rangle = \mathrm{Tr}\!\left(\frac{1}{2}\begin{pmatrix}1&1\\1&1\end{pmatrix}\begin{pmatrix}0&1\\1&0\end{pmatrix}\right) = \mathrm{Tr}\!\left(\frac{1}{2}\begin{pmatrix}1&1\\1&1\end{pmatrix}\right) = 1$$
$$\text{Mixed state: }\langle\sigma_x\rangle = \mathrm{Tr}\!\left(\frac{1}{2}I\cdot\sigma_x\right) = \frac{1}{2}\mathrm{Tr}(\sigma_x) = 0$$
Key Insight
$\langle\sigma_x\rangle = 1$ for the pure state vs $\langle\sigma_x\rangle = 0$ for the mixed state. The $\sigma_x$ measurement completely distinguishes them. Off-diagonal coherences are directly measurable through the appropriate observable.
7
Entanglement Entropy of General Two-Qubit State
HardEntropy

Consider $|\psi\rangle = \cos\alpha\,|ud\rangle + \sin\alpha\,|du\rangle$ with $\alpha \in [0,\pi/2]$.

(a) Compute $\rho_A = \mathrm{Tr}_B(|\psi\rangle\langle\psi|)$.

(b) Find the eigenvalues of $\rho_A$.

(c) Compute $S_E(\alpha)$. For what $\alpha$ is $S_E$ maximum?

Complete Solution
a

Expanding $|\psi\rangle\langle\psi|$:

$$\rho_{AB} = \cos^2\!\alpha\,|ud\rangle\langle ud| + \cos\alpha\sin\alpha\,(|ud\rangle\langle du| + |du\rangle\langle ud|) + \sin^2\!\alpha\,|du\rangle\langle du|$$

Taking the partial trace over $B$ — the cross terms vanish since $\langle u|d\rangle = 0$:

$$\rho_A = \mathrm{Tr}_B(\rho_{AB}) = \cos^2\!\alpha\,|u\rangle\langle u| + \sin^2\!\alpha\,|d\rangle\langle d| = \begin{pmatrix}\cos^2\!\alpha & 0 \\ 0 & \sin^2\!\alpha\end{pmatrix}$$
b

$\rho_A$ is already diagonal, so the eigenvalues are:

$$\lambda_1 = \cos^2\!\alpha, \qquad \lambda_2 = \sin^2\!\alpha$$
c
$$S_E(\alpha) = -\cos^2\!\alpha\log\cos^2\!\alpha - \sin^2\!\alpha\log\sin^2\!\alpha$$

This is maximized when both eigenvalues are equal: $\cos^2\!\alpha = \sin^2\!\alpha = 1/2$, i.e., $\alpha = \pi/4$.

Answer
Maximum entanglement at $\alpha = \pi/4$: $S_E = \log 2$ (a Bell state / singlet). At $\alpha = 0$ or $\pi/2$: $S_E = 0$ (product state, no entanglement). The state interpolates smoothly between zero and maximum entanglement.
8
Trace Formula for Correlations
HardTensor Products

For the singlet $\rho_{AB} = \tfrac{1}{2}(|ud\rangle\langle ud| + |du\rangle\langle du| - |ud\rangle\langle du| - |du\rangle\langle ud|)$, compute $\langle\sigma_z \otimes \sigma_z\rangle = \mathrm{Tr}(\rho_{AB}\cdot\sigma_z\otimes\sigma_z)$.

Complete Solution
eigenvalues

The operator $\sigma_z \otimes \sigma_z$ acts on the basis $\{|uu\rangle, |ud\rangle, |du\rangle, |dd\rangle\}$:

$$\sigma_z\!\otimes\!\sigma_z|uu\rangle = (+1)(+1)|uu\rangle = +|uu\rangle$$
$$\sigma_z\!\otimes\!\sigma_z|ud\rangle = (+1)(-1)|ud\rangle = -|ud\rangle$$
$$\sigma_z\!\otimes\!\sigma_z|du\rangle = (-1)(+1)|du\rangle = -|du\rangle$$
$$\sigma_z\!\otimes\!\sigma_z|dd\rangle = (-1)(-1)|dd\rangle = +|dd\rangle$$

So $\sigma_z\otimes\sigma_z = \mathrm{diag}(+1,-1,-1,+1)$ in the ordered basis.

matrix

The singlet density matrix in the $\{|uu\rangle, |ud\rangle, |du\rangle, |dd\rangle\}$ basis:

$$\rho_{AB} = \frac{1}{2}\begin{pmatrix}0&0&0&0\\0&1&-1&0\\0&-1&1&0\\0&0&0&0\end{pmatrix}$$
trace
$$\langle\sigma_z\otimes\sigma_z\rangle = \mathrm{Tr}(\rho_{AB}\cdot\mathrm{diag}(1,-1,-1,1)) = \frac{1}{2}\bigl(0\cdot1 + 1\cdot(-1) + 1\cdot(-1) + 0\cdot1\bigr) = -1$$
Answer
$\langle\sigma_z\otimes\sigma_z\rangle = -1$. Perfect anti-correlation: whenever Alice measures spin-up, Bob always measures spin-down, and vice versa. This is the characteristic signature of the singlet state.
9
Decoherence: Off-Diagonals Vanish
HardDecoherence

A pure state $|\psi\rangle = \tfrac{1}{\sqrt{2}}(|u\rangle + |d\rangle)$ interacts with an environment $E$. Initially $|E_0\rangle$. After interaction: $|u\rangle|E_0\rangle \to |u\rangle|E_u\rangle$ and $|d\rangle|E_0\rangle \to |d\rangle|E_d\rangle$. The total state becomes $|\Psi\rangle = \tfrac{1}{\sqrt{2}}(|u\rangle|E_u\rangle + |d\rangle|E_d\rangle)$.

(a) Write $\rho_\text{system} = \mathrm{Tr}_E(|\Psi\rangle\langle\Psi|)$.

(b) Show that the off-diagonal element $\rho_{ud} = \langle u|\rho|d\rangle = \tfrac{1}{2}\langle E_d|E_u\rangle$.

(c) If $\langle E_d|E_u\rangle = 0$, what happens to $\rho_\text{system}$?

Complete Solution
a

Expand $|\Psi\rangle\langle\Psi|$ and trace over $E$:

$$\rho_\text{system} = \frac{1}{2}\bigl(|u\rangle\langle u|\langle E_u|E_u\rangle + |u\rangle\langle d|\langle E_d|E_u\rangle + |d\rangle\langle u|\langle E_u|E_d\rangle + |d\rangle\langle d|\langle E_d|E_d\rangle\bigr)$$

Assuming normalized environment states $\langle E_u|E_u\rangle = \langle E_d|E_d\rangle = 1$:

$$\rho_\text{system} = \frac{1}{2}\bigl(|u\rangle\langle u| + \langle E_d|E_u\rangle\,|u\rangle\langle d| + \langle E_u|E_d\rangle\,|d\rangle\langle u| + |d\rangle\langle d|\bigr)$$
b
$$\rho_{ud} = \langle u|\rho_\text{system}|d\rangle = \frac{1}{2}\langle E_d|E_u\rangle \checkmark$$

The off-diagonal coherence is controlled by the inner product of the environment states. If the environment states are similar (nearly the same), coherence is preserved. If they are distinguishable, coherence is suppressed.

c
Decoherence
If $\langle E_d|E_u\rangle = 0$ (orthogonal environment states), then $\rho_\text{system} = \tfrac{1}{2}(|u\rangle\langle u| + |d\rangle\langle d|) = I/2$. The quantum superposition has become a classical mixture — decoherence is complete. The coherences have not been destroyed; they are encoded in entanglement with the environment. To a local observer who cannot access $E$, the system appears completely mixed.