ICM, the Independent Chip Model, describes why tournament chips are not all worth the same: the chips you lose cost more than the same number of chips won would gain, because busting ends your chance at every later payout.
In a cash game every chip is worth the same. In a tournament it is not, and the effect is strongest on the money bubble and at big pay jumps. The practical result is that you need more equity than the pot odds say before you risk your stack, and the closer the spot, the clearer the fold. Marginal all-in calls that would be fine by chips alone become folds when busting is expensive.
ICM does not mean folding everything. It changes marginal calls for your tournament life, not value bets, and not decisions where you are far ahead. It also does not apply when no pay jump is near — at 20bb in the middle of a tournament, top pair still calls a pot-sized bet as usual. Tournament stacks are short anyway, which makes SPR low and turns many postflop spots into commitment decisions; ICM is the extra pressure layered on top of that price, not a replacement for it. No fancy floats on the bubble either: when busting is this expensive, the cheap speculative calls go first.
Worked example
FAQ
What does ICM mean in poker?
It stands for Independent Chip Model, the standard way to turn tournament chip stacks into the prize-money value of each stack. Its key lesson is that losing chips hurts more than winning the same amount helps.
When does ICM matter most?
On the money bubble and at big pay jumps, when you face an all-in with a marginal hand. Far from the money, or with a strong hand, play the chip price as usual.