Shannon entropy is the shortest average codeword length a lossless compressor can achieve by encoding i.i.d. symbols. However, there are cases in which the objective is to minimize the \textit{exponential} average codeword length, i.e. when the cost of encoding/decoding scales exponentially with the length of codewords. The optimum is reached by all strategies that map each symbol $x_i$ generated with probability $p_i$ into a codeword of length $\ell^{(q)}_D(i)=-\log_D\frac{p_i^q}{\sum_{j=1}^Np_j^q}$. This leads to the minimum exponential average codeword length, which equals the R\'enyi, rather than Shannon, entropy of the source distribution. We generalize the established Arithmetic Coding (AC) compressor to this framework. We analytically show that our generalized algorithm provides an exponential average length which is arbitrarily close to the R\'enyi entropy, if the symbols to encode are i.i.d.. We then apply our algorithm to both simulated (i.i.d. generated) and real (a piece of Wikipedia text) datasets. While, as expected, we find that the application to i.i.d. data confirms our analytical results, we also find that, when applied to the real dataset (composed by highly correlated symbols), our algorithm is still able to significantly reduce the exponential average codeword length with respect to the classical `Shannonian' one. Moreover, we provide another justification of the use of the exponential average: namely, we show that by minimizing the exponential average length it is possible to minimize the probability that codewords exceed a certain threshold length. This relation relies on the connection between the exponential average and the cumulant generating function of the source distribution, which is in turn related to the probability of large deviations. We test and confirm our results again on both simulated and real datasets.

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