External events do not impact our psyches like clubs hitting our heads. There are intervening variables that make all the difference in how we experience and react to the stuff around us. These are mediators and moderators.
Mediators explain how external events take on internal psychological significance. Take the statement:
"Perceived deservingness mediates emotional reactions to the good or bad fortunes of others."
Which means emotional reactions to the good or bad fortunes of others depends on whether we think they deserved what they got.
On the other hand, moderators explain the direction or strength of the relationship between external events and psychological significance. For instance, the statement:
"Perceived control moderates how a person reacts to a upward social status comparison"
Which means that if we're around someone who's "higher" than us on a dimension that matters (e.g., wealth, looks, personality), the degree to which we feel good or bad about it depends (in whole or part!) on whether we feel we have what it takes to get where they are. If we feel there are things we can do to get to that level, well then the contrast between us is only a mild and temporary bummer or maybe even an inspiration. If we feel we don't have what it takes (e.g., in qualities, skills, or opportunities), then we're more likely to be upset by the contrast.
Yeah, that's a simplification. Because everything is complicated and don't you forget it.
Keep all this in mind for Part III of this series, in which we will discuss the relationships between perceived control, hope, and inequality.
Reference:
Baron, R. M., & Kenny, D. A. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51, 1173-1182. p. 1176