FROM WIKIPEDIA:
The top-scorer on each show keeps his or her winnings and returns as the champion in the next match, and non-winners receive consolation prizes. The current prizes are $2,000 for the second-place contestant and $1,000 for the third-place contestant. Since the show does not provide airfare or lodging for most contestants,[18] these cash consolation prizes alleviate the financial burden of appearing on the show. Prior to May 16, 2002, the second-place contestant typically received a vacation package or merchandise and the third-place contestant received lesser-value merchandise. Prior to 1984, all contestants kept their winnings, and contestants who finished with scores below $0 received consolation prizes.
When the 1984 version began, the show’s creators decided to award full winnings only to the champion as a means of making the game more competitive, so that the final outcome is not always evident until the end of the game. On the Fleming version, contestants would occasionally decide that they only wanted to win a certain amount of money, and stop ringing in when they reached that amount, instead of attempting to become a returning champion. Others would refuse to write down a question for Final Jeopardy! if another contestant had a significant lead.