The Clash of Civilizations

Merchant Agent Model v1.0

At the broadest level, merchants have four attributes.
1. An owner
2. A cultural profile
3. An amount of cash
4. A list of trade routes

The "owner" is simply whoever gets the merchant's profits (or absorbs their losses). This will almost always be the entity that created the merchant in the first place.

The cultural profile determines the merchant's stomach for risk and creativity, as well as their likelihood of aiding tech diffusion.

The cash is the merchant's liquid assets.

The trade routes are the most complex part. They are how the merchant makes money.

I. Merchant creation
Purchasing goods in one locale, paying for their transportation over long distances, and then hoping they can be sold at a profit requires a fair amount of capital. In short, someone must be able to gather money together and be willing to take a risk with it.

The people of a province can take the initiative to build a merchant just like they could build a schoolhouse or improve their agricultural capacity. In this case, the province's populace is effectively the owner of the merchant, and the merchant has that province's cultural profile The effectiveness of these merchants is based on the province's PCI and technology. Using the current proposed tech tree:
1. Currency: trade becomes possible. Wealthy individuals may risk their own assets. Populace can build merchants; these start out with half the province's PCI in cash (times some multiple).
2. Banking: the idea of loaning money. People willing to risk taking a loan to become a merchant. Populace-built merchants start with the province's PCI in cash (times the multiple).
3. Corporation: large numbers of small investments can be focused into colossal undertakings. Populace-bulit merchants start with twice the PCI in cash (again, times the multiple).

Player-built merchants:
The player can foot the bill for merchant creation, with whatever penalties are normally assessed on the purchase price for player rather than populace building of infrastructure. The player's treasury is now the owner of the merchant. These merchants start with no cash. Instead, the player directly transfers money from the treasury to the new merchant for starting capital.

The cultural profile for player-created merchants is that of whatever province the player creates the merchant in.

(Under economic systems that completely ban private enterprise, this will be the only way to make new merchants. Such merchants still don't require extensive player control after the initial creation. In contrast to populace-created merchants, however, they will obey direct orders from the player.)

II. Trade routes

Each time the agent gets to think, it identifies a special available in great excess in its home province, or one not available but useful in its home province. If it fails to find one here, it considers other provinces in its civ before giving up.

Once a province and a good are chosen, it generates a list of provinces (based on the knowledge of its home civ) where the good is expensive (if dealing with a special found in the home province) or available (if demanded in the home province). It will set up a trial trade route path to as many of these as is clock-feasible. (Two or three will probably be OK, if you use something like A*. A* is especially nice since it can automatically employ differing cost functions for each step.) The cost functions will depend at the very least on terrain and transportation technologies, but I really don't want to draw up a list until you decide whether you like this method or want something more abstract that doesn't use specific trade paths. This method gives the trade route a specific path, which gives the player huge numbers of ways to affect trade without controlling it, such as:
a) security -- when traveling far from garrisoned cities, or through civs that have poor law and order, the merchant must hire an armed escort to protect the goods to protect from highwaymen, pirates, etc.
b) infrastructure -- no nonsense of roads producing trade. Here, roads are good b/c merchants use them (they decrease their cost function), and so it is less expensive for them to get specials in and out of your cities.
c) law -- charge a tariff, and you get a cut of the trade going through your civ into your treasury, increasing the merchant's cost function. Of course, merchants will try to go around you, but sometimes, they can't. On the other hand, you could subsidize a trade, or more severely, ban it. (This won't make the trade impossible, it will just add a heft cost function to carrying it through your civ, increasing with the effectiveness of your law enforcement and decreasing with the corruption of your officials.)
d. warfare -- set up a siege or blockade, and the merchants' cost function goes up quite a bit due to the need for smuggling it through.

After finding a path, the merchant calculates two numbers
1) the unit startup cost of the route -- based on the type(s) of transport (physical and social) needed to be paid as one-time costs.
2) the unit profitability of the route (price difference between the supplier and customer provinces, plus ongoing security wages and bribes), divided by the amount of time the trip take. If there exists a commodity that can be traded in the return direction, its price difference will be added to the forwards price difference in this calculation.

This would be the point to try to find a triangular trade route, if no return commodity exists and clock cycles permit.

Based on the start-up costs, the profitability (essentially a pay-back rate), and its cultural profile, the merchant picks a trade route (if any) to buy into. It pays the startup costs (times 1.5 or so -- see below), and thereafter, gets the pay-back rate paid into its account. I don't know how often you want to inspect the path to take advantage of new infrastructure or check for interruption by warfare. Changes in commodity prices should be checked every turn simply because that pays into the merchant's account and because it's easy.

III. Merchants and their bank accounts

The merchant's cultural preferences dictate what they do with the money that accumulates in their account -- how much they reinvest and how much goes to the owner. Reinvestment can take one of two forms. Either they can expand an existing trade (by paying more startup cost to increase the capacity of their route, increasing their profit by a similar factor). Small increases should have some discount over large ones. Let's say that if the merchant wants to increase a route's capacity by more than 50% in one turn they pay the same 1.5 penalty they did on route startup. Otherwise, they can save up money, and then scout out a second route to invest in.

IV. What's missing
This is rough right now. The trade route thing is the biggest question I have right now -- do you want the additional flavor that comes with the trade routes have set paths, or do you want abstract routes? Quartermasters are an easy modification -- rather than deal in specials, they deal in food and resources, and their "home province" is an army (also, they _must_ find a route -- their "cultural profile" essentially says pay as little as possible, but pay what you have to.)

Essentially, my question at this point is: considering that this is largely a computer-controlled activity, is the flavor that comes from trade routes having exact paths worth the complexity?