In a poker tournament, the Independent Chip Model (ICM) is a mathematical model that is used to more precisely calculate overall equity in a tournament.
Due to chip stack values changing over time as the tournament progresses with the remaining players getting closer to the money, each player must take into account the rewards/risks of any play they make with respect to their equity.
The basic assumption of the ICM model is based on stack sizes and the prize pool distribution. Each player has a chance to win the tournament exactly equal to the proportion of chips they have in play. So if you have 30% of the chips in play, you have 30% chance to win the tournament.
A player’s probability of finishing the tournament in each expected position is then multiplied by the payout for that position and this calculation is what determines the players overall equity.
This concept would be unfamiliar to cash game poker players, but using ICM considerations in tournament poker will help you make tough decisions when approaching the money bubble in MTTs and SNGs.
An example of ICM is explained by one of tournament poker’s biggest stars Yevgeniy Timoshenko in this video below.