I apologize for how incoherent the following will be. The idea is a fresh one, and I’m still struggling to articulate it.
Something that sparked some of the first original thoughts I’ve had while reading Thinking, Fast and Slow came about when Daniel Kahneman was covering how System 1 deals with valuation of joint products. In short, economics assumes that prices are sum-like in nature, essentially that the value of a stack of goods is determined by summing the individual prices (not account for things like bulk discounts). In short, again not accounting for these other factors, the value of a good with 5 more of something than another good will cost 5 more (forget the absence of units if you would). An alternative, and an important alternative at that, would be that the price of the goods is determined by averaging the price of the individual constituents. In the case above, a good with 5 more will not cost 5 more but somewhere around 5 over the number of the goods (the additional product is averaged over the units).
Here’s why this distinction matters. System 1, the “thinking fast” system, cannot deal with sum-like variables, making thinking fast a difficult thing to do when creating economic models. But since the average consumer doesn’t use their System 2 frequently while at the grocery store, it might be valuable to introduce System 1 thought into some System 2 economic models. As current models of supply and demand are dependent on utility functions that assume sum-like evaluations of utility, they lapse in functionality when System 1 interferes with the rational consumer model. In order to account for this lapse, something that behavioral economics focuses on as a field, it might be possible to reorient the way we calculate utility such that utility is an averaging variable instead of a sum-like one. What exactly that looks like mathematically is something I’ve yet to apprehend.