Intimidation advantage goes for every sport and level, even the professional level. Tyson went on a rampage based on his reputation. A lot of people went into the Tyson fights expecting to get knocked out, and they did.
As for pickup basketball, no one should be afraid of taller competition. They obviously have their advantage, but the shorter players have theirs too. As much as short guys do not like to guard tall guys in the paint, tall guys do not like to guard short guys on the outside, especially if the short guy is running around.
Here are a few of my tips and tricks playing against taller guys in pickup games:
1. Run around. Big guys do not like to run, turn, and pivot. Eventually, you'll get a free jumper, lane, or lay. Make enough baskets or an impressive play, and they'll get scared.
2. Dribbling Exhibition. Even if you don't have great dribbling skills, pretend that you do. A big guy is not going to take the ball from you; he has to bend too much. If he reach, you teach. He'll eventually back off. Most big guys would rather give up the jumper or lane than get embarrassed.
3. The Post without the Ball. As odd as this may seem, posting a big man is easier than what you think. In a pickup game, a guy isn't going to push you out unless you have a reputation for posting. This gives a odd match-up. If you get the ball, around 5-10 feet, you have options. Pump fake, scoop, fade, hook, opposite lay, or pass. Or, run back out and turn and shoot. A big man probably won't follow you too closely; if he does, drive by. As the shorter guy, your footwork and center of gravity is better (at least should be).
Before I started playing basketball, I always assumed that taller, bigger, stronger guys were better. With more experience, it's easier to see that everyone has advantages and disadvantages.
Defense is harder, but there are tricks too. Maybe another day.