EDIT: (Sorry kenneth, I've just oversight your post.

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(Basically I've got the same Idea as you got.

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I don't think at all, that mercenaries are overpowered.
Especially, if we're just speaking about hiring one mercenary per turn.
Gaining a huge mercenary army on this way, feels somehow right to me.
But I even don’t think that hiring mercenaries should be a rewarding emergency strategy, at all.
Hiring many mercenary in one turn should be only feasible to civ's which got a very strong economy.
Though, in the current situation it's also feasible to civ's that got a bit over average economy.
Therfore it seems a good idea to ad some kind of a mercenary-market simulation.
The basic Idea:
To meet an increased mercenary demand on a given mercenary-supply-capability (the capability of providing mercenaries within your nation) a higher mercenary-price must be established on the mercenary-market.
This means, hiring the second mercenary should cost more than hiring the first, hiring the third more than the second and so on.
For example: Each mercenary’s price could increase by 1/2 based on the last mercenary’s price. The first Mercenary’s price remains on 120 Gold.
Therefore it would look this way:
1’st mercenary hired this turn: 120 Gold
2’nd mercenary hired this turn: 120 *1_1/2= 180 Gold
3’rd mercenary h.t.t.: 180 *1_1/2= 270 Gold
4’rd mercenary h.t.t.: 270*1_1/2= 405 Gold
and so on.
By this small modification it would take 975 Gold instead of 480 Gold to hire 4 mercenaries in one turn.
Of cours each other rate of increase would be as well as this one. The real improvement is the increase, it self.
Therefore an emergency hiring of mercenary would only be feasible to the strongest economies on Erebus.
So, what do you think, is it a good idea, would it be easy to mod.
Thanks for your responses.