The articles suggested here by dgraab are very helpful in understanding the reasons why students become or resort to bullying.
Basically, bullying is a cultural phenomenon within school populations that may have various reasons, including depression and anxiety in the aggressor, an attempt by the aggressor to achieve power over the victim, and/or a behavior that is stabilized by peer "accessories" who stand by without assisting the victim. Often the peer observers laugh and actually in some cases, popularize the aggressor as "cool." In some cases, particularly when the bully is a high academic achiever, teachers and staff may not even recognize the bullying behavior.
Whatever the case, bullying appears to be a power play by the aggressor. Unfortunately, in too many cases, it succeeds.
Do check out these articles. They are quite informative.
Usually because they have low self esteem they feel if others are laughing at someone else it takes the attention off them. Other times if they are physically abusive it can be because they want to be in control and be on top sometimes if it is a bad case it is influenced by the parents.