Crippling the AI’s Research Capability

Has anyone else made the discovery that my friend has made? The internal value that the AI has assigned to technology with respect to trade is so high that you can cripple that Civ’s economy by asking for crazy amounts of gold per turn.
The game plays out like this:

1. Build lots of cities, just grab as much land as you can while keeping your military entirely defensive
2. Try to meet every civ you can and trade of tech that you don’t have. When you encounter a civ that wants a tech you have and they have no tech to offer ask for as much gold per turn as you can.
3. Every time you research a new tech trade it to every civ, they’ll trade it amongst themselves if you give it to one so give it to all of them at the same time. Always ask for per turn gold, nothing else. The caveat is of course not to trade something that could threaten you, e.g. allow them to build a wonder before you or give them a defensive/offensive unit you can’t counter. Also if they get a tech that you want trade for it and immediately turn around and trade it to all the other civs, for an exorbitant price of course.
4. There will come a time when their research is basically stagnant and they devote all of their economy to paying you off every turn.
5. When you’ve jumped 5 to 6 techs ahead of everyone, be selective about which technologies you release to “the unwashed masses”, e.g. give them lots of dead-end technologies with wonders you’ve already built. Because of the way CIV 3 is structured there are a fair chunk of technologies that give no benefit except to open up other areas of research, giving those away is pretty harmless but gives big benefits.
6. Win the game any way you want. The positive side effects of this strategy are:
* The other CIVs love you, every successful trade pulls your reputation up another notch and makes them that much more receptive. Playing them off on each other through military alliances becomes easier because of this diplomatic advantage. Also the UN victory becomes that much easier
* You have all the tech and essentially control what tech the other CIVs can and cannot have. When you want to go to war simply withhold a few tech advances and watch your modern armor crush their piddly musketmen.
* Your economy will be strong enough that you can devote all your income to research and luxuries. In essence the other civs will be paying your maintenance costs and providing you enough income to steal any technologies you need, hurry any production you want and upgrade all units in a single turn.

It seems that the AI is willing to make big sacrifices in order to gain a technology advance, the sacrifices can actually be big enough to cripple their economic and scientific growth for 20 turns. There is a limit to how much the AI will pay you, but this is the absolute limit based on how much all of their colonies are actually capable of producing turn by turn.

After playing it out a few times, I have found no circumstances, given a reasonable starting position and accessibility to all the other civs, that this strategy will not ensure victory. Question is, is this an exploit? If so obviously Firaxis should take steps to correct it. If not, does it need to be adjusted in some way? It seems a little too easy and a little too powerful, but well within the game rules, so I’m not sure.

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