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From the strategy guide:
Only production and rate of research change for the AI, and for each level, starting at Chieftan, the percentage of these for the human player vs. the AI are:
200%, 120%, 100%,90%,80%,60%
So the AI are twice as slow at the lowest level, and almost twice as fast at Deity, the highest level. At lower levels the AI are more likely to forgive and less likely to betray, too.
Some other things can be influenced by difficulty level, too:
1) Hut results
2) Barbarian strength
3) Number of citizens naturally content
4) Degree of corruption
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