http://gametheory101.com/courses/international-relations-101/
Terrorists spoil the trust between the foreign power and a cooperative domestic government by committing attacks to trick the other side into believing that the domestic government is uncooperative. Worse, this trick is not a result of the foreign power making an irrational mistake--the target rationally calculates that the domestic government is more likely to be uncooperative having observed an attack and retaliates accordingly.
This lecture is based off of the following article:
http://www86.homepage.villanova.edu/maghan.keita/readingsterrorism/terrorism/Andrew%20Kydd,%20Sabotaging%20the%20Peace.pdf
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