Militia Sergeants and Urban Militia are NOT polearms so they dont get any bonus versus cavalry. But they are armour piercing and against Lancers that would give them a bonus of +3 attack.
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The attack and defense stat is for melee while armour is for missile. And a armour upgrade gives both better defense for melee and armour v missile yes.
The big problem with upgrades is that they can make considerable changes to a units base stats. 4 Valor is 4 attack and 4 defense (8 combat points) added and that can turn a rather low quality unit to be better than the best elite units.
But you still have to look at costs. Its not all cheap units that are good. The Lancer is still one of the best units for its cost if you compare with other upgraded cavalry. A v4w1 hobilar would cost 1388 florins and have same total attack/defense stat as a Lancer that cost 850.
Of course it was not always like that. MTW 1.0 (the version we had before the patch and later on the Viking Expansion) was very different. Valor upgrades were cheaper while the elite units were more expensive. We saw lots of alans back then heh.
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