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JohnM2433
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Milwaukee, Wisconsin
Jul 2002 time: 21:22
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The AI's "reasoning" is as follows:
A luxury is more beneficial to a huge empire than a tiny nation, because each city gets one happy face. The more cities you've got, the more useful the luxury is. I think Soren first explained that the AI evaluates luxury trades in this way, and in retrospect, it seems quite reasonable, in fact more so than the way most humans would do it (one luxury for another is an "even trade").
The same probably holds for strategic resources, because the more cities you have (and the bigger they are) the more they can build with that resource. So this is one of the penalties for being big you're just going to have to live with. On the other hand, if you wind up with a puny country, resource trading to your larger neighbors should help you keep up in technology, since you will be able to sell for more and buy for less.
One more thing: if a civ has a total monopoly on a luxury, they will try to charge more for it -- a LOT more, in my experience. This is simply the free market at work. 
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