See also: Boring Advice Repository, Solved Problems Repository, Grad Student Advice Repository
I often find that my understanding of the world is strongly informed by a few key concepts. For example, I've repeatedly found the concept of opportunity cost to be a useful frame. My previous post on privileging the question is in some sense about the opportunity cost of paying attention to certain kinds of questions (namely that you don't get to use that attention on other kinds of questions). Efficient charity can also be thought of in terms of the opportunity cost of donating inefficiently to charity. I've also found the concept of incentive structure very useful for thinking about the behavior of groups of people in aggregate (see perverse incentive).
I'd like people to use this thread to post examples of concepts they've found particularly useful for understanding the world. I'm personally more interested in concepts that don't come from the Sequences, but comments describing a concept from the Sequences and explaining why you've found it useful may help people new to the Sequences. ("Useful" should be interpreted broadly: a concept specific to a particular field might be useful more generally as a metaphor.)
Unfortunately, this quick example is something that teachers and school administration often don't get. If you make a threat for misbehavior, you must follow through, otherwise you have seriously undermined your and every other teacher's credibility, and then you will predictably get misbehavior on almost every lesson since now.
Unfortunately, the reality is often that teachers make empty threats, hoping that using big words will scare students, and when this does not work, they rationalize not following through by "they are just children" and "they need to get a second chance", although some students already had literally hundreds of "second" chances. And the worst thing is when teacher insists on the punishment, but after a phone call from parent, the school administration overrides their decision. Of course students share their "success stories", so the next day the whole school know about the winning strategy.
Thomas Schelling proposed a useful strategy: make small threats for small infractions, and then follow through on them. This gives credibility to your larger threats, without too much inconvenience for either party.
(And, of course, try to make the whole thing as predictable as possible; never be capricious with your own authority.)