At its core, the self is our meaning-making apparatus. Over time, it makes sense of our experience of affect — which includes emotions, movements, and thoughts — to add coherence to it, turning it into a story. Our affect operates within the pleasure-pain axis, meaning that our body uses information from the outside world to create an experience that ranges between good and bad. In simplistic language, if you feel good, you have been rewarded for an action that is worth doing again; if you feel bad, then it’s time to do something else or rethink your situation. This axis is far more diverse, granular, and complex than simply good and bad, but this is roughly how we learn.
Much more complex. Humans are rather bad at judging risk, gambling, addiction, etc.