A large game-theoretic literature has developed to study terrorism. This literature has made significant contributions to the understanding of terrorism by providing a useful guide to parsing the empirical record, by helping to illuminate how seemingly puzzling behavior by terrorist organizations can be understood as the outcome of strategic interactions, and by providing some guidance to policy. Specifically, the formal literature helps provide plausible logically coherent explanations for seemingly anomalous patterns in the real world including: (1) there is more terrorism when the economy is bad, but terrorists themselves tend not to be poor; (2) terrorist groups often keep lots of paperwork, but sometimes they operate with little formal organization; (3) many states appear to tolerate low levels of terrorism they could stamp out and counterterrorism spending seems to over-emphasize publicly observable actions; (4) opposition groups often choose terrorism despite the fact that it seldom succeeds; and (5) bargaining with terrorists rarely succeeds in ending conflict. This brief piece focuses on explaining how the formal literature provides useful guidance for understanding these patterns.