Establishing/declaring a Naval Blockade should be a players Political Option which could be selected or deselected at any major belligerent player’s option, with varying economic and morale effects on the blockaded power as well as affected neutral countries. The kind of blockade imposed and the number of warships dedicated to it having various economic and morale effects on the blockaded power and political effects on neutral powers. A simplified system for game purposes could use the following a three level schema.
An initial blockade level - which would be similar to the initial British blockade which loosely followed the rules of the 1908 Declaration of London restricting military contraband using stop and search on all ships encountered in the restricted area. The effectiveness depending on the number of ships dedicated to blockade duty.
A second blockade level - increasing prohibition on ALL import and export from blockaded (German, for example) ports including food and agricultural products. A percent increase in effectiveness over level one. Effectiveness depending on the number of ships dedicated to blockade duty.
A third blockade level - limiting or prohibiting industrial and agricultural imports to neutral as well as blockaded ports in the restricted area. A further percent increase in effectiveness over level two. Effectiveness depending on the number of ships dedicated to blockade duty.
Similarly the German player should be able to select or deselect the type of submarine warfare to be implemented as desired, as was done historically.
No submarine warfare (no submarines deployed to the a Shipping Box or elsewhere on the map)
Submarine attack on military naval targets only. Submarines used as on map naval units (which by the way I've found to be quite suicidal in the game as opposed to their historical effectiveness and near invulnerability, at least in the early months of the war).
Restricted submarine warfare. After declaring a blockade implementing the same effects as the initial blockade level above. Effectiveness depending on the number of submarines located in the Shipping Box.
Unrestricted submarine warfare. Simulating unannounced submerged attacks on enemy shipping encountered with the possibility of attacking neutral ships not properly identified. Effectiveness depending on the number of submarines located in the Shipping Box, but very much enhanced over the previous submarine warfare level. Also enhanced would be the effects on the blockaded power and the negative effects on neutral powers relative to support for Germany. The Lusitania Special Event should only occur after the declaration of unrestricted submarine warfare. Given the negative effects of unrestricted submarine warfare the German player should be able to resume a more restricted level of warfare (as it did historically) with the option of returning to unrestricted warfare one additional time.
I have not seen a Special Event or Political Decision in the game related to implementation of the Convoy system of protecting merchant shipping. It needs to be an event or decision available sometime in early 1917 which when implemented increasingly reduces submarine effectiveness. An effectiveness that can be related to the number of destroyers and other patrol craft deployed to the Shipping Box. The game uses the Technology level of antisubmarine warfare (ASW) to reflect a reduction of submarine warfare effects on merchant shipping. Since ASW techniques were generally primitive and ineffective during WW1 this seems to be a less historical way of representing Entente efforts in the area. (Minefields were a major cause of submarine losses, in the game minefields are automatically provided.)