In their seminal 1979 paper hereRepresentations of Coxeter groups and Hecke algebras (Invent. Math. 53, doi:10.1007/BF01390031), Kazhdan and Lusztig studied an arbitrary Coxeter group $(W,S)$ and the corresponding Iwahori-Hecke algebra. In particular they showed how to pass from a standard basis of this algebra to a more canonical basis, with the change of basis coefficients involving polynomials indexed by pairs of elements of $W$ (in the Bruhat ordering) over $\mathbb{Z}$. Even though the evidence at the time was quite limited, they conjectured following the statement of their Theorem 1.1 that the coefficients of these polynomials should always be non-negative. (In very special cases this is true because the coefficients give dimensions of certain cohomology groups.)
Several decades later, Wolfgang Soergel worked out a coherent strategy for proving the non-negativity conjecture, in his paper Kazhdan-Lusztig-Polynome und unzerlegbare Bimoduln uber Polynomringen. J. Inst. Math. Jussieu 6 (2007), no. 3, 501–525. This is posted on the arXiv here. Now
- Kazhdan–Lusztig-Polynome und unzerlegbare Bimoduln über Polynomringen. J. Inst. Math. Jussieu 6 (2007), no. 3, 501–525, doi:10.1017/S1474748007000023, arXiv:math/0403496
Now that his program seems to have been completed, it is natural to renew the question in the header:
UPDATE: It's been pointed out to me that older work by Jim Carrell and Dale Peterson involves the non-negativity condition, though their main goal is the study of singularities of Schubert varieties in classical cases. See the short account (with a long title) by J.B. Carrell, The Bruhat graph of a Coxeter group, a conjecture of Deodhar, and rational smoothness of Schubert varieties. Algebraic groups and their generalizations: classical methods (University Park, PA, 1991), 53–61, Proc. Sympos. Pure Math., 56, Part 1, Amer. Math. Soc., Providence, RI, 1994. The
- J.B. Carrell, The Bruhat graph of a Coxeter group, a conjecture of Deodhar, and rational smoothness of Schubert varieties. Algebraic groups and their generalizations: classical methods (University Park, PA, 1991), 53–61, Proc. Sympos. Pure Math., 56, Part 1, Amer. Math. Soc., Providence, RI, 1994. https://doi.org/10.1090/pspum/056.1
The first section develops for an arbitrary Coxeter group some consequences of non-negativity of Kazhdan-Lusztig coefficients for the combinatorial study of Bruhat intervals. (For For further details about the geometry, see the 2003 paper by Carrell and Kuttler in Invent. Math. 151.)
- Carrell, J., Kuttler, J. Smooth points of T-stable varieties in G/B and the Peterson map. Invent. math. 151, 353–379 (2003). https://doi.org/10.1007/s00222-002-0256-5, arXiv:math/0005025