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Usually my tactic has been overwhelming force. Early in the game I do send out 4 mercenaries to deal with animals or outlaws interfering with my trading routes and I notice that one of the units takes way more damage than the others. I then retreat that uunit and another starts taking all the damage. You'd thing that 4 mercenaries surrounding a pack of wolves would take equal damage. Does the game just send in one unit at a time?
Melee combat has a maximum engage ratio like 1:2 i think, meaning if you face 2 bandits you can engage with 4 mercenaries even if you have 12. Archers are free for all. Probably the first units sent in takes the brunt of the damage, I believe all of them gets experience but haven't watched closely
I have done no testing, I am curious too. The in game tips says that 100% experience doubles the units attack strength. During one playthrough I was able to make scouts early and with only 2 units (4 horsemen) at 100% experience they were surprisingly effective against bandits.
Repair rate depends on free labor:
Town with little free labor: Merc went from 65% to 82% in 10 weeks -> 1.7%/week
Town with excess labor: Merc went from 65% to 100% in 7 weeks -> 5%/week
Merc weekly upkeep at partial health:
Health/100 * 400 (upkeep cost of a merc on Advanced)
So for a merc to full heal in a labor-loaded city is 20 weeks * 200 (average upkeep while healing) = 4,000. Cost of a new merc is 2,000.
Seems to me that retreating weak units is economically inferior to replacing them, especially if you can time the new arrival's entrance into battle as the other is dying.
Quick note on experience: My full veteran merc has 50% more fighting power than the new recruits. So that makes him worth 3,000, and still the upkeep during healing doesn't really pay for itself.