I've played in many jams with up to four guitars, five if you include the bass. It can work well if no one is selfish. Personally I just listen to what everyone else is doing and try to find a spot in the background that doesn't interfere with anyone else. Sometimes I just play partial chords. Sometimes I'll just play a bass part depending on what the bass player is doing. Sometimes I turn up the distortion, turn down the volume, and strum full chords on the one beat. Lately I'm usually playing acoustic so I find a place on the fretboard where no one else is playing and strum chords there. i.e. If someone is playing open chords I'll play bar chords or partial chords farther up the neck. If no one is playing open chords I'll play open chords. The other key thing is to keep your volume down until it's your turn.