Wisdom is one of those qualities that is difficult to define—because it encompasses so much—but which people generally recognize when they encounter it. And it is encountered most obviously in the realm of decision-making.
Psychologists tend to agree that wisdom involves an integration of knowledge, experience, and deep understanding that incorporates tolerance for the uncertainties of life as well as its ups and downs. There's an awareness of how things play out over time, and it confers a sense of balance.
Wise people generally share an optimism that life's problems can be solved and experience a certain amount of calm in facing difficult decisions. Intelligence—if only anyone could figure out exactly what it is—may be necessary for wisdom, but it definitely isn't sufficient; an ability to see the big picture, a sense of proportion, and considerable introspection also contribute to its development.
Wisdom can be acquired only through experience, but by itself, experience does not automatically confer wisdom. Researchers are probing the social, emotional, and cognitive processes that transmute experience into wisdom.
Numerous theories have now emerged. Developmental psychologist Paul Baltes conceived of wisdom as expertise derived from five key components (rich procedural knowledge, rich factual knowledge, an understanding of different life contexts, an awareness of the relativism of values and priorities, and the ability to recognize and manage uncertainty).
Sociologist Monika Ardelt believes that individuals develop wisdom as personality characteristics encompassing reflection, compassion, and the pursuit of truth. Psychologist Robert Sternberg understands wisdom as balance—balance between oneself and others so that actions are directed at the common good.