Full House
Join Date: Aug 2009
Location: Philippines/Saudi Arabia
Posts: 983
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Let me give a quick example of the ICM effect. I know this has been done before, but it is always good to be reminded how dramatic the effect can be. Say we are at the very start of a 9 handed SNG, 1500 starting stacks. Let's say the winner takes $500, 2nd $300 and 3rd $200. Ignore the rake for simplicity. According to the ICM, each player expected value (EV), based on the size of his chip stack, is $111. Now let's say at the first hand, you stack another player (ignore the blinds for simplicity). In a cash game, your worth has just doubled. Not so in a SNG. In a SNG, according to the ICM, your EV is now $203, not $222. What happened to the missing $19? They have been split evenly between the other players. So you risked your entire $111 of EV to earn only $92 of EV... This tells you how much less the chips you earned are worth than the ones you already had: the 1500 chips you earned are worth 92/111=82.9% of the 1500 you already had.
The effect is even more dramatic on the bubble. Same example, 4 players and all have the same number of chips. Everyone's EV is $250. Now you stack a player. How much is your EV now? $383. The remaining $ have again been distributed evenly to the other remaining players (you do the job and take the risks, and they benefit! No wonder the bubble lasts a long time!). The chips you earned are worth only 133/250=53.2% of the ones you already had!
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