Anne Ryan/AP The announcement from the Royal Swedish Academy of Sciences in Stockholm said the 72-year-old Thaler "has incorporated psychologically realistic assumptions into analyses of economic decision-making.

By exploring the consequences of limited rationality, social preferences , and lack of self-control , he has shown how these human traits systematically affect individual decisions as well as market outcomes," the committee said in a statement.

Speaking from his home in the United States to a news conference at the Royal Academy, Thaler said he felt the most important impact of his work was "the recognition that economic agents are human."

"In terms of real-world implications, once you start to understand the ways that we are weird, irrational beings, you can structure policies to move people toward the ends that you would want," Malone tells Morning Edition.

When the same Swedish journalist asked what Thaler would do with the 9-million kronor ($1.1 million) monetary portion of the Nobel award, the economist: "I will say that I will try to spend it as irrationally as possible."