The Independent Chip Model is the most popular way to ascertain the monetary value of chip stacks in a game. In this lesson you will learn what the ICM is, how it works, and what its limitations are.
The fundamentals of the Independent Chip Model
In this video you will learn what the Independent Chip Model (or the ICM) is , how the ICM assigns a monetary value to chip stacks And what the limitations of the ICM are
As you saw in the previous lesson, multiplying your stack in SNGs doesn’t equally multiply its value thus the number of chips in SNGs and their value are not directly correlated. That’s why you should always think of your decisions in terms of their monetary profitability, instead of profitability measured in chips. In order to recognize the monetary profitability of your decisions, you should be aware of the real value of chips. The most popular model for giving a monetary value to chipstacks during tournaments is called the Independent Chip Model Here’s how it works so that you can understand it.
Imagine that you’re playing in a 9-man SNG and there are 5 players left in the game. To make it clear let’s mark every player and his chips with different color. You will now see how the ICM assigns a monetary value to players’ stacks.
For the purposes of explanation, you can think of this model as of a lottery where each chip is a ticket. The more chips in a given player’s stack, the more tickets he gets. Now imagine that all tickets are put in a drum and we draw for first place. After this draw we have a winner, and all of his tickets are removed. Now we draw for second place and remove those tickets, and so on and so forth for the other tickets.
If this procedure is repeated millions of times, we can ascertain the probability of each player finishing in a particular place by keeping track of how many times they finish in this position As you can see, these probabilities depend on the stack sizes of players left in the game. For the sake of simplicity, numbers have been rounded.
Once we have the probabilities, it's easy to calculate how much each player will win on average by using the tournament’s payout structure. To calculate a given stack’s monetary value multiply the probability of finishing in particular places by the prize for these places. The outcome is the „average prize” that a player with given stack would win. According to the ICM this “average prize” is the monetary value of a given stack
To glean a better understanding of how the ICM works and to feel the dependence between a given stack’s size and its value, take a look at the complete evaluation of all stacks in the example.
Manual evaluation of stacks is possible, but very complicated and of course cannot be done during the game. That’s why it’s crucial to have an intuitive understanding of the ICM. Although you will never know the exact value of stacks, an intuitive and educated estimate is enough in-game. This ability can be obtained and honed by calculating stacks’ value in special programs and practicing with these calculations using examples from the game. In this video’s corresponding article we have provided links to specific ICM calculators. When using the ICM calculations, keep in mind that to make calculations possible, the ICM is based on the following assumptions: • All players are equal in skill. • Current position is irrelevant. • Table image of players is irrelevant. • Blinds are irrelevant. Because of these assumptions the ICM may sometimes be limited in terms of accuracy, however it still provides valuable and useful results.
In this lesson you have learned about the fundamentals of the Independent Chip Model: The Independent Chip Model is a model for assigning monetary value to chip stacks in tournaments. The ICM evaluates chip stacks by estimating the probability of each player finishing in a particular place and calculating their equity in the prizepool. The ICM is based on specific assumptions, therefore it has certain limitations.