A penny lost is valued more highly than a penny received.
Here is why:
Research shows that a punisher and a reinforcer do not have equally opposing effects on behaviour.
This is known as an asymmetry of reinforcement and punishment or an asymmetry in the law of effect.
When people are offered a choice between punishment and reinforcement options, the punishing impact of losses on choice behaviour is 2-3 times more potent than the reinforcing effects of gains. For instance, when the monetary gain is the same on punishment and reinforcement alternatives, it appears that losing a penny is three times more punishing than receiving the same penny reinforcing.
Consequently, a reward usually results in a repetition of earlier behaviours or choices, while a penalty leads to an avoidance of previous actions.
Photo by Michael Longmire