Analysing your IQ
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Past investments (time, money, effort) should not influence future decisions—only future costs and benefits matter.
Mental models are thinking tools. Sunk Cost Awareness is one of the most powerful—used by successful founders, investors, and strategists to cut through complexity.
Ask "Would I start this today knowing what I know now?" If no, quit regardless of past investment.
This model works because it strips away irrelevant detail and exposes the core structure of a problem. Most people reason by analogy ("what do others do?"); this framework forces you to think from first principles.
Don't finish a bad book just because you're 200 pages in.
This model is most useful when you're stuck. If your current approach isn't working, Sunk Cost Awareness often reveals the hidden constraint.
Over-applying: Not every problem benefits from this model. Match the tool to the situation.
Under-applying: People learn the model but don't practice it. Application takes repetition.
Misunderstanding the principle: Surface-level understanding leads to poor execution. Study the examples.
Ignoring context: The same model works differently in different domains. Adapt accordingly.
Identify a current decision you're facing. Write down the assumptions you're making. Challenge each one.
Look at a past failure. Apply Sunk Cost Awareness retroactively—would it have changed the outcome?
Teach the model to someone else. If you can't explain it simply, you don't understand it well enough.
Set a reminder to apply this model once per week for the next month. Track the results.
Sunk Cost Awareness often pairs well with other Decision Making models. Combining frameworks multiplies their power.
Mental models require specific cognitive traits to execute. Do you have the Intelligence for this?
Past investments (time, money, effort) should not influence future decisions—only future costs and benefits matter.
Ask "Would I start this today knowing what I know now?" If no, quit regardless of past investment.
Don't finish a bad book just because you're 200 pages in.
Use Sunk Cost Awareness when facing complex decisions in the decision making domain, when conventional approaches aren't working, or when you need a structured framework for analysis.
Sunk Cost Awareness is used by strategic thinkers, business leaders, and anyone who needs to make high-stakes decisions under uncertainty. It's particularly popular in investing, startups, and engineering.
Yes. Mental models are learnable skills, not innate talents. The key is deliberate practice—actively applying the model to real decisions, not just reading about it.