[LGM]

For Happiness type I advocate Peaceful, even if that is not your style. Here are the reasons:

1. You can happiness from building ships, signing treatings, and winning battles.

2. You lose happiness from broken treatings and declarations of war.

3. You have a smaller penalty than bloodthirsty races do for lost battles and no decision battles.

4. You can gain happiness for incrementally increasing your alliance levels one level at a time.

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Other tips:

Offer a Non Agression treaty to races first. Bloodthirsty races want to go directly to war or jump to as high of a treaty level in one shot to minimize the negative effect on their empire. Bloodthirsty races do not like incremental treaty improvements.

When you identify a bloodthirsty race, fight lots of small battles that you can win or acheive no decision. Lost battles hurt bloodthirsty races more than others.

Never break a treaty with a bloodthirsty race. Go straight to war, otherwise, they can declare war the following turn and gain another benefit and give you another negative (assuming you are not bloodthirsty.

Neutral races are even more prone to lots of small actions as every battle hurts them. They want big decisive battles. Make them fight lots of little ones. You can even sacrifice ships just to keep the pressure on them. Look at Happiness.txt to see the details of the modifiers. Neutrals do get the biggest automatic positive per turn, but there is little else they can do to improve happiness apart from troops and facilities.

Peaceful is best as building ships and winning battles reward you. Bloodthirsty must stay consistently victorious to reap benefits.