Independent Chip Model (ICM) (ICM)

Also known as: Independent Chip Model, ICM model

A model that converts tournament chip stacks into real-money equity using the Malmuth-Harville finishing-order probabilities.

ICM is the standard way to turn chip stacks into Dollar EV ($EV). It uses the Malmuth-Harville algorithm: your probability of finishing 1st is your share of all chips in play; finishing 2nd is computed recursively over every player who could finish 1st ahead of you, and so on down the payout ladder. Each finishing position is weighted by its prize, and the sum is your real-money equity.

The core insight is that chips are worth less the more you have — equity is concave. Doubling your stack does not double your money, so you risk chips at a premium near pay jumps. This is why a chip-neutral spot can be a clear fold under ICM: chips lost cost more equity than chips won return.

ICM ignores skill edge, position, and blind level (FGS extends it for future play), but it is the backbone of every bubble and final table deal decision. The pressure it creates is quantified by risk premium and bubble factor.