I believe I have developed a cookie-cutter strategy for beating Masochistic difficulty - Standard and Large maps, default everything.
---
Expand normally. When the colonization phase is over, begin boosting your population by keeping Approval at 100%. Set Research to 100% with spending at as close to 100% as your treasury permits.
Research the expansion techs first (Impulse Drive, Space Militarization, etc.) then the +% economic ones (Planetary Improvements, Xeno Economics, etc.) then Xeno Entertainment (to increase taxes) then finally begin on the dipomacy branch. Focus exclusively on all the +% Diplomacy techs, roughly in the following order:
Xeno Communication
Universal Translator
Diplomatic Relations
Trade
Advanced Diplomacy
Expert Diplomacy
Xeno Ethics
Interstellar Governments
Alliances
Interstellar Republic
Interstellar Democracy
Majesty 1
Majesty 2
Majesty 3
Star Democracy
Meanwhile, explore Anomalies with your Flagship as normal. On the higher difficulties it does not take long for the AIs to discover/contact you.
Here's the important part: whenever you meet a new civ, trade all non-Diplomacy techs you know for as much as they are willing to give you. Begin by prioritizing their techs, followed by their BCs, then Scout Ships, then military vessels, then Freighters, then Transports, then Trade Goods. That's roughly the order in which the AI is willing to parts with it's stuff (from least to most expensive). Do not under any circumstance trade the +% Diplomacy techs! Keeping checking in with the AIs every couple of turns to see if they've researched anything new, if so, trade everything around until there's is nothing left for them to sell. Repeat.
Economically, you do not need to do much other than max out your pop, and research with whatever income you have left. Consider buying researching buildings on your bonus research tiles, but no more than that is needed. Set up your capital with a few Factories in order to build Diplomatic Translators as soon as they become available. Although this Trade Good is obviously really good with this strat, I've found that it's not essential as you can just buy it later.
Eventually your colonies will max out in size and you can safely increase taxes. This produces a lot of income, so there's the temptation to being Social spending. I usually wait until after the first UN meeting to start building stuff, which is just around the Majesty's in the list above.
---
Why this works: the AI does not tech trade quit as aggressively as you do, and because it does not prioritize Diplmacy techs, you're getting a better and better deal each time.
Eventually your buying power becomes so high that you can begin acquiring their ships. The AI's Scouts allow you to contact all the civs on the map very quickly. The AI will replace its Scouts, which is good for you since it gives you more time. Once you start buying their military ships, it's more or less game over: the AI tries its best to produce the best military possible, but it's all-too-willing to sell it, too. Because the AI loses a ship for every ship you buy, you should have the top Military in no time. Then you are safe to keep playing the tech broker (if one civ ever gets out of control, just build the Spin Control Center, no one bothers you after that). It's especially funny when you get to the point that you can buy their Troop Transports, as you are essentially buying their population.
I have won two games this way on Masochistic, one an Alliance victory in the second year, one a Military victory early in the fourth year. Both were very easy games on average starts. I'm confident this works on Obscene, not sure about Suicidal.
Returning to the topic of this post: the main reason why this works so well is that the AI completely neglects the Diplomacy branch of the tech tree. It have seen it go all the way to Industrial Sector and Quantum Torps (for example) before picking up Diplomatic Relations. It's a bit better about researching the government techs (which provide diplo bonuses), but not much.
Having all the diplomacy bonuses in the hands of the human player generates a snowball effect that I have yet to see the AI identify and counter; you can just buy anything that the AI cares about (except for alignment, which becomes irrelevant). I'm not sure this is the "best" way to win on Masochistic, but it's definitely cookie cutter (which is bad).
Anyone else have the same experience?