Hedging in finance is a way of avoiding downside risk. You pay stable insurance payments to avoid large, unexpected payments for healthcare if an accident occurs. Farmers sell corn at a fixed price long before they harvest it in order to hedge against the risk of falling corn prices. They have a guarantee that someone will at least pay the current price.
Notice, hedging mitigates downside risk, at the cost of the upside. You end up with an outcome more in the middle. The upside of the insurance scenario is that you opt not to pay for insurance and you also don't ever get into an accident. For the farmers, the eliminated upside is that corn prices go up instead of down.
Sometimes, people hedge socially. One example of this is the choice to not approach someone attractive for fear of rejection. The eliminated upside is obvious, you never have a chance with him or her. Some hedge by predicting their own poor performance in the near future, hoping to avoid disappointment. For this particular hedge, what is the eliminated upside? There doesn't seem to be one, at first blush.
At second blush, people change their expectations. This is a possible reason governments resort to hyperinflation; they need to surprise a very observant public. Any normal inflation won't do, because people update their beliefs about reality.1 For a more personal example, because I've tried to hedge so much in the past, people don't trust my predictions about how I'll do on tests, or anything for that matter. Often, people start to see social hedgers as overly image conscious, and engineers of artificial personae.
In brief, hedging costs. If one day I hear of a perfect hedge, meaning, one that eliminates downside risk with no cost, I'd be happily surprised.
1. Wikipedia: Hyperinflation
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