We investigate possibilities of choosing reasonable regularization par
ameters for the output least squares formulation of linear inverse pro
blems. Based on the Morozov and damped Morozov discrepancy principles,
we propose two iterative methods, a quasi-Newton method and a two-par
ameter model function method, for finding some reasonable regularizati
on parameters in an efficient manner. These discrepancy principles req
uire knowledge of the error level in the data of the considered invers
e problems, which is often inaccessible or very expensive to achieve i
n real applications. We therefore propose an iterative algorithm to es
timate the observation errors for linear inverse problems. Numerical e
xperiments for one- and two-dimensional elliptic boundary value proble
ms and an integral equation are presented to illustrate the efficiency
of the proposed algorithms.