Terrorism has come to the forefront over the last decade, in particular with suicide missions. Suicide bombers seem to defy logic and rationality, in particular, they are surprisingly educated. In the face of this problem, there have been essentially two approaches. The first one, which I would call the US-Israel option, is combat violence with violence. The second one, call it European, is to make suicide less worthy by helping the relevant areas to develop. None seems to be particularly fruitful, none the least because they contradict each other and are both applied to the same areas.
In a pair of papers, Karen Pittel and Dirk Rübbelke try to understand the logic of suicide bombers and consequently how to address terrorism. Essentially, they show that the decision to kill yourself in a terrorist act may likely involve limited information and time inconsistency. Terrorists are rational, it is simply that their perception of reality is twisted by isolation and propaganda. Time inconsistency is apparent when a bomber chickens out of a terrorist act, although it may be consistent under some circumstances to announce an act and not execute it. This should be exploited.
The policy option are then to offer non-monetary alternatives to suicide bombing, like providing other opportunities for personal development (a job, emancipation), as well as reducing the information bias, that is, propaganda. The European approach mentioned above seems thus more promising. While the American approach clearly offers a deterrent as it reduces the pay-offs to surviving family, it does not help with providing positive alternatives and in particular getting out of despair. And it does not help in propaganda and aleviating information biases.