Once you fall down the rabbit hole, you just have to keep on going. If people's choices are not a reliable guide to their well-being, you have to turn to something else. Ask people how happy they are and measure well-being in terms of happiness. Evaluate health care spending by looking at objective measures of health, such as mortality, morbidity, or survival rates. Chuck out the entire elegant theoretical framework of welfare economics.
Read the whole essay.
If the whole purpose of doing economics is to make policy recommendations based on application of the "elegant theoretical framework of welfare economics," then findings from behavioral economics represent one challenge. Hayekian considerations of local knowledge are an alternative challenge. I think that even if one could produce the grand synthesis of behavioral economics and neoclassical economics for which Woolley might long, the Hayekian problem would remain.