Two definitions of judgment…
First, from psychology:
The term judgment refers to the cognitive aspects of our decision-making process.Judgment in Managerial Decision Making, Bazerman and Moore
And from economics:
All human activities can be described by five high-level components: data, prediction, judgment, action, and outcomes. For example, a visit to the doctor in response to pain leads to: 1) x-rays, blood tests, monitoring (data), 2) diagnosis of the problem, such as “if we administer treatment A, then we predict outcome X, but if we administer treatment B, then we predict outcome Y” (prediction), 3) weighing options: “given your age, lifestyle, and family status, I think you might be best with treatment A; let’s discuss how you feel about the risks and side effects” (judgment); 4) administering treatment A (action), and 5) full recovery with minor side effects (outcome).Agrawal, Goldfarb, Gans
In the first view, judgment is broad and prediction is basically just judgment in a particular context (the future). (A similar definition is given in Michael Lewis’s The Undoing Project describing how psychologists Kahneman and Tversky thought about judgment and prediction.) In the second definition, judgment is narrower and involves weighing tradeoffs. Judgment is about understanding your own utility function.
I thought about these two definitions when reading this piece in Aeon about wisdom. Here’s how a group of philosophers and social scientists summed up that concept:
For instance, we found that scientists, like many philosophers before them, considered wisdom to be morally grounded: an aspirational quality helping you figure out the right thing to do in a complex situation and promote the common good. For the group, wisdom broadly included ideas such as the sense of shared humanity, pursuit of truth, recognition of the need to balance personal interests with other people’s interests, and a general willingness to cooperate and have compassion for others. Most scholars didn’t insist on moral behaviour as a prerequisite for wisdom. Sometimes a situation prevents one from acting on one’s moral impulses. Other times people make mistakes. Nonetheless, our task force agreed that moral grounding was the first foundational pillar of the common wisdom model in empirical sciences.
The second foundational pillar we arrived at was meta-cognition – the overarching mental processes that guide our thoughts. Human thoughts can be guided by a range of emotions, motives and visceral responses. Thoughts are governed by other thoughts, too, which is what meta-cognition is about. We engage in meta-cognition when creating reminders for an ingredient we might otherwise forget when cooking a new recipe, or when following specific instructions for assembling an Ikea chair. Meta-cognition also helps us check ourselves when we are wrong or when as we gather a broader range of perspectives on complex issues, gaining a big-picture view. You engage meta-cognition when showing signs of intellectual humility, recognising the limits of your knowledge. Or when you consider the diverse perspectives of those with whom you disagree.(emphasis mine)
Squint and you can see both definitions of judgment here. Metacognition describes, in practice, much of what we think of as good judgment in the psychological sense. By thinking about thinking, we think a bit better. “Moral grounding” arguably speaks to judgment in the economic sense: it is primarily about weighing tradeoffs in complex situations to figure out what counts as best — which is what it actually takes to map consequences onto a utility function. (Moral grounding considers more than the individual in that calculation, but that’s not at odds with utility functions, it only sometimes seems that way because of how they’re taught in intro econ.)
So, what is wisdom? It’s possessing good judgment in multiple senses: the ability to think carefully about the world including about causes and consequences; and the ability to weigh personal and moral values in complicated situations, to arrive at good decisions.