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Let's say 3 candidates were their initially and A and B got 2 votes each while C got 1 hence C should be eliminated then in the next round we need to see the second preference votes right? As the first preference will again be tied for the first 4 voters? or do we need to see the 2nd preference of only the voter who had voted for C?

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The logic is that the votes for the loser in the current round are removed in the next round, so yes, as a practical matter, the 2nd place vote for the odd man out voter is counted.

More generally stated, after removing all votes for eliminated candidates, the highest place vote by each voter is counted.

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