As humans they have a million (billion) year ecological history and will be biased in economic decisions by that history.

Foremost, humans value losses more than gains. Losses could cause death. Gains a full stomach. Which would be more important to you? If you were a rational economic unit in Adam Smith's universe, valuing losses more than gains would be foolish.

Amos Tversky calculated that humans value losses 2.25 times more than gains. He would have won a $2.5 million Nobel prize for this insight, but he died before the award.

Humans also have a a lot of trouble with time. Don't we all? A future gain is not worth as much as a gain today. That is a given. But what is the rate, the variance, the skew, the kurtosis and every other order of statistics you can and can't name. In Adam Smith's universe the rate is exponential (compound interest).

Another renegade economist suggested that human comprehension of time is not exponential but much like the famous Saul Steinberg cover of the New Yorker.  Standing on 9th Avenue and looking west Steinberg sees 10th Avenue about a block away. Another block gets him to the Hudson. A third block reaches to the Pacific, beyond which Japan, China and Russia are all equidistant. Thaler thinks we have a hyperbolic interpretation of time duration.

Thaler seems to "get" people. He understands why long shot bets at the horse races get worse odds as the day progresses. He knows why people buy health club memberships they will not use. Hopefully he is not taking advantage of us to raid our 401k's, as he obviously could, but is satisfied with his 2017 Nobel Prize.