How does the armor value work?

Because sadly nobody felt like answering this question despite the 100 point bounty I had to torture Geralt in the name of science and let some low-level nekars beat him up in various stages of undress.

I recorded the numbers in a spreadsheet and came to the following conclusions:

1. The damage formula is Damage = (inital_damage - armor) * (1 - resistance)
2. Humans and non-humans (elves, dwarfs...) do "slashing", "piercing" or "bludgeoning" damage, depending on their weapon
3. Monsters do "monster" damage (only witcher gear provides a percent-resistance against this)

Example:

1. You are wearing armor parts which combined give you 200 defense and 20% bludgeoning resistance.
2. A bandit hits you with a mace. The attack has an attack power of 1000 bludgeoning damage.
3. First, your armor is subtracted, leaving 800 damage.
4. Then the resistance is applied which further reduces the damage by 20% (160 damage).
5. Your final vitality loss is 640 points.

When you are interested in the gory details, here are the numbers which lead me to these conclusions. Test setup: Level 18 Geralt vs. Level 9 Nekars east of Lurtch in Velen.

Numbers:

Setup       Naked   
            |   My best stuff
            |   |   Formal Attire   
            |   |   |   Griffin Witcher Set (no boots because I accidently sold them))
            |   |   |   |   My best shirt only
            |   |   |   |   |   My witcher shirt only
            |   |   |   |   |   |
Armor       0   200 4   148 92  90
Blunt res   0   42  0   5   30  5
Slash res   0   47  0   17  30  10
Pierce Res  0   12  0   8   0   5
Monster res 0   0   0   24  0   15

Numbers     358 161 389 185 206 250
            366 168 326 154 286 205
            331 143 331 137 265 233
            354 166 378 141 266 238
            332 160 343 147 250 210
            364 131 380 150 243 218
            329 178 332 142 272 246
            385 123 378 160 297 250
            390 145 369 159 263 219

Average:    360 150 358 152 260 229

Expected:       156 356 158 264 226

I am aware that a sample size of 9 numbers per test setup is not a lot, but the numbers still match the formula above quite well.

What does this mean for equipment selection?

• The stronger the enemy is hitting, the more important does damage resistance become
• When fighting monsters, resistance against monster damage can be more important than high defense, so it might be worth keeping a witcher set even when its defense is lower than mundane gear.