Right-of-way rules
The universal rule
On a single-lane bridge, the car that reaches the entrance first has the right-of-way. Slow down well before the entrance so you can stop in time. If you can see the other car clearly, wait. If both arrive at the same time, the car on the right yields — but you'll see most drivers wave the other through out of politeness.
Some bridges are marked with a small "Yield" sign, which always means the smaller road yields to the bigger one. Even when you technically have right-of-way, locals will sometimes wave you on — they know the rules and they're being polite.
FAQ
What about multi-tunnel sequences?
The Vaðlaheiði tunnel near Akureyri has staggered entries — pay attention to the traffic light at the entrance (red = wait, green = go). The Vestfirði tunnels are narrow: buses and campervans must sometimes reverse to passing places.
What if I refuse to back up?
You'll hold up traffic and frustrate locals. In tight tunnels, the larger vehicle is supposed to reverse to a passing place, but in practice everyone backs up until someone finds a wider point. It's rarely more than 50 metres.