Do note, there was actually a HUGE punishment for losing.

Only to the extent that you care about points, whereas the winner was given a tangible prize (in my case, a book).

Actually, I'm now remembering that that isn't entirely true: there was a prize for the person with most points, but also a prize that was assigned randomly, weighted according to ((player points) - (least number of points of any player) + 1), or something. So the more you lose by, the less chance you have of winning that prize. But if you're near the back anyway, your chance of winning is so small that this is a very small punishment.

(I think we might have had someone who was convinced to get many negative points, to reduce the effective spread among everyone else. Or I might be making that up.)