In Chiang Mai, you have to drive based on predictions. If you make decisions based on what is happening, you're too late; you have to anticipate what is about to happen and drive accordingly. You have to know what everyone else is about to do because you are usually driving so close to each other that you wouldn't have time to react - this guy is going to stop, that guy is going to accelerate, this guy is turning, that guy's about to cut me off. Most of the time, this works beautifully (everyone does what you expect them to do, and responds to what they expect you to do) and is the only thing that allows so many vehicles to move around this city during rush hour.
Occasionally, it doesn't work. The other night I was on my way home driving past Warmup ("the hottest club in town") thinking to myself "drive carefully, most of these people are probably drunk, be alert, be cautious..." and I was changing lanes to get out from behind a car that was going slowly when all of a sudden the car was no longer going slowly but in the split-second it took me to check my blind spot, it had stopped (unexpected action) and I was now crashed into it's back bumper. I was going slowly and so I just got thrown forward a little, but I definitely cracked the plastic. Of all the cars in Chiang Mai I could crash into, it had to be a BMW. The driver got out, saw that I was a farang (westerner) and immediately asked how much money I wanted to offer him for the damage. I started to to rub off the scuff marks to try to make it look a little better and to buy time because I hadn't the faintest idea how much it would cost to fix this. As far as I knew it could be 100 baht or 10,000. He took my stalling to mean that I didn't intend to pay and got offended when the friend I was with asked if he had been drinking, so he proceeded to call the cops. After yelling 'farang mumbledthai farang' a couple times into the phone, he tried to scare me by telling me what I had done was a criminal offense and we would have to go to the police station. After he called the cops, he wouldn't talk to me anymore so I called a Thai teacher that I work with and he came out to help. Once the teacher told the guy I was an ajaan (teacher at a university) everything seemed to smooth out; he suggested 2,000 baht and I accepted, eager to get out of the situation without police paperwork. I needn't have worried though, while I was paying, the police officers showed up and must have just come from the club and thrown on their uniforms because they seemed drunk and rather than asking what happened, just started flirting with me! An altogether different experience than it would have been in the US.
Side Note: Thais are generally very nice drivers; the horn is used only to indicate location, like: "I'm right here, don't run me over," never as a "f***you a**hole" like it often is in Canada/the US. Even when someone totally cuts you off, or someone is blocking the entire intersection in rush hour traffic, Thais just smile and deal with it, which is usually how they deal with problems in general - nice sometimes, frustrating other times.