A few small tips...
In SP you can gain a advantage over the AI by buying all the mercenaries and never letting any AI nation have any.
Simply bid 1gp over asking price and they will be yours, everytime. When it comes to renewing there contract you after bid full price again +1gp, to 100% guarentee you keep them.
The AI it seems only ever bids the exact amount...
When you get a mercenary commander with a magic item, consider sending that mercenary to his death in the last month of his hire. Simply place him up front on his own and give attack closet orders. Have your own commanders in the rear with empty slots, with a little luck you will pick up the magic item off your former employees rotting corpse...
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