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A formal version of the game of chicken has been the subject of serious research in game theory. Because the "loss" of swerving is so trivial compared to the crash that occurs if nobody swerves, the reasonable strategy would seem to be to swerve before a crash is likely. Yet, knowing this, if one believes one's opponent to be reasonable, one may well decide not to swerve at all, in the belief that he will be reasonable and decide to swerve, leaving the other player the winner. This unstable strategy can be formalized by saying there is more than one Nash equilibrium for the game, a Nash equilibrium being a pair of strategies for which neither player gains by changing his own strategy while the other stays the same. (In this case, the equilibria are the two situations wherein one player swerves while the other does not.)

One tactic in the game is for one party to signal their intentions convincingly before the game begins. For example, if one party were to ostentatiously disable their steering wheel just before the match, the other party would be compelled to swerve. This shows that, in some circumstances, reducing one's own options can be a good strategy. One real-world example is a protester who handcuffs himself to an object, so that no threat can be made which would compel him to move (since he cannot move).

The payoff matrix for the game of chicken looks like this:

    	               Swerving     Driving straight
    Swerving 	         0, 0 	        -1, +1
    Driving straight 	+1, -1   	-20, -20

Of course, this model assumes that one chooses one's strategy before playing and sticks to it - an unrealistic assumption, since if a player sees the other swerving early, he can drive straight, no matter what his earlier plans.

This model also assumes that, if both parties swerve, they will not swerve in the same direction.

Under this model, and in contrast to the prisoner's dilemma, where one action is always best, in the game of chicken one wants to do the opposite of whatever the other player is doing.