Speaking as an economist (we’re big on game theory, voting systems, and the like) . . .
Mathematically, in theory, and assuming her perfect information and voter attentiveness, a preferential system is equivalent to a runoff when noone gets a majority of the vote.
In practice, especially with a large field (look at the Democrats this year!), there is a limit to how many preferences a voter will make at a time. Three, sure. Four, maybe. Five? Certainly not seven . . .
If there are only perhaps three to five candidates, I would expect it to work well as an “instant runoff.”
I would also limit the number of preferences to list to that three to five. If none has a majority at that point, start with the top two candidates, and if they have less than 51%, keep adding candidates until you have 51%, and then have a runoff.
Again, as an Economist: having those second to fourth choices on record, cast when they could mean something, is useful information as to the preferences of the electorate.
If you have a couple of third parties getting 10 to 20 per cent before elimination, that means more than the three per cent or so third parties get today.
MPat:
In fact, proportional representation is supposed to have an effect of encouraging having many different (thus being further from center) parties.
The catch is that proportional voting
guts individuals having their own representative. It replaces representing a district with being responsible solely to the party.