Quote Originally Posted by alpaca
Not really sure but iirc each city can trade with each other city if it wants to (only one-sided restrictions for the number of trade routes) so the game uses the cities that generate the most income to trade with.
Which factors influence that, I have no idea though.
Well, some of them are obvious at least: trade route distance and the value of the resource(s) involved both seem to affect the value of the trade route. I would speculate trade rights do too, though IIRC you can't have trade with a nation you don't have trade rights with, so this is difficult to test - what seems clear is that you get more benefit from routes to other faction's provinces, which is likely the effect of trade rights with that faction.

As for determining the routes you get, I imagine there is a maximum distance that a trade route is allowed to span. With that knowledge, the game can determine how much profit you'd make from trading with each province that is in range, and order the list by profitability. Then it could select the top N of them to establish trade with, where N is how many trade routes the current settlement is allowed. In reality the problem is probably a bit more complex than this to solve completely since full trade routes would presumably eat 1 available fleet from each end of the route. This means that a route from Rennes to London for instance might be among the most profitable for Rennes, while London may be able to do far better than that if trading with the Danes. In that case it may be beneficial to accept a lower trade route for Rennes in order to give London more routes to Danish settlements. So in reality the game probably generates all possible trade route networks for your nation, and then selects the optimal configuration, since a settlement-centered view can easily lead to a less-than-optimal solution. I realize it sounds like a lot of work, but to current processors this is more akin to counting on one hand than anything else really...