Quote - I understand that scaling the figure under the clothes will make it "fill" a tight item. But here I want the cloth to actually shrink. It's not a matter of Stretch resistance, but rather the opposite. The cloth simulation seems to have no concept of cloth contracting on its own - no in-built spring trying to bring the vertices closer together.

I tried progressively decreasing the scale of the cloth after frame 1, but Poser seems to ignore that information. The result of the simulation acts like scaling is never involved. After running such a simulation, if you turn the "Dynamics" dial to 0, the panties scale UP. In other words, the cloth sim progressively scaled the prop back up during the simulation in compensation for the down-scaling I selected. The end result is they don't change size at all.

The back looks fine because it basically drapes over the buttocks, but here's what I get in the front.

Not the sharpest nail in the bag when it comes to all this and I realize this was not what you were trying to get but actually i love this look. Sort of a loin cloth pantie/modesty apron. Sexy!