This article is a theoretical contribution to mental model research, which currently has different threads. Whereas some researchers focus on the perceived causal structure, others also include decision policies and decisions. We focus on the link between recognized causal structure (“mental models of dynamic systems”) and policies, proposing Johnson-Laird’s theory of mental models as the link. The resulting framework hypothesizes two types of systematic mental model errors: (1) misrepresentation of the system’s structure and (2) failure to deploy relevant mental models of possibilities. Examination of three experiments through this lens reveals errors of both types. Therefore, we propose that the cognitive theory of mental models opens a path to better understand how people construct their decision policies and develop interventions to reduce such mental model errors. The article closes by raising several questions for empirical studies of the reasoning process leading from mental models of dynamic systems to decision policies.