Following the axions of rationality and self-interest, it is diffcult to fathom why someone would be driven to suicide bombing. This is especially difficult once you realize who suicide bombers are. According to Alan Krueger and Jitka Maleckova, who studied the Hezbollah movement, they are relatively rich and educated, thus not the ones with no future we often hear about in the crime literature. Claude Berrebi shows that this applies as well for Hamas. Still, Edward Sayre demonstrates that labor market conditions matter. Efraim Benmelech and Claude Berrebi also argue that bombers with higher human capital have a higher success rate and are thus assigned bigger targets.
But how could suicide bombing be rational? Jean-Paul Azam argues that a little inter-generational altruism is sufficient. Karen Pittel and Dirk Rübbleke claim that terrorists provide an impure public good: a public good with a private good component (say, fame). Bryan Caplan thinks that terrorists must be somewhat selfless and somewhat irrational, especially suicide bombers, but they are still surprisingly close to homo oeconomicus.
What does this mean in terms of combatting terrorism? Explaining terrorists that they are mistaken may not help much, as does improving local conditions. Taunting them less would be more successful, especially as the Sayre study above shows also that the timing of suicide bombing by Palestinians is closely tied to Israeli moves.