ICC Help: k-factor
The k-factor is a number in the formula used to calculate ratings. It determines how many rating points you gain or lose in one game. For example, if you beat someone with the same rating as you, on ICC you will gain 16 rating points, and in FIDE you will gain only 7.5 rating points. This is because the k-factor on ICC is 32, and the k-factor in FIDE is 15 (for people with ratings below 2400).
Many people think that the larger k-factor on ICC is responsible for the high blitz ratings of the top players on ICC (over 3300) compared with the top FIDE ratings (2800). This is not the reason. The k-factor only determines how quickly your rating moves towards the level that you are performing at. It does not determine what that performance level is. Here is a simple example to illustrate this idea:
Suppose Joe and Fred are both rated 2200. They play a 4-game match and Joe wins 3-1. A score of 3-1 is a performance 200 rating points higher than your opponent's performance. Joe's rating will go up, and Fred's rating will go down, after the match. If Joe and Fred keep playing 4-game matches, and Joe wins every match 3-1, then eventually Joe's rating will go up close to 2300, and Fred's rating will go down close to 2100. That's a 200-point difference in their ratings. Even if they play hundreds of matches, Joe will never go above 2300 and Fred will never go below 2100. This is completely independent of the k-factor used to calculate ratings. The final "goal" rating (2300 for Joe and 2100 for Fred) has nothing to do with the k-factor.
The k-factor determines how fast Joe will approach 2300 and how fast Fred will approach 2100 in this series of matches. For example, on ICC it might take only 5 matches for Joe to reach 2290, but in FIDE it might take 10 matches.
So you see that the k-factor is not responsible for the high ICC blitz ratings. I am not a statistician, and cannot prove the cause of the high ratings. But one possible reason is that in ICC blitz you can choose your opponent. Then it is possible for high-rated players to:
1) Choose computers that they know they can beat with a certain strategy.
This idea is supported by the results of the new 5-minute rating category on ICC, in which you cannot choose your opponent. The top ratings in that category are only 2500.
Another possible reason for the larger range of ICC blitz ratings is that the range of ratings in a rating system may increase as more games are played. On ICC there are over 4 million games played each year, many times more than the number of games rated by FIDE.