I wanted to ask which level of caching should be used in Hibernate based web applications?
Caching at transaction level seems to be fine but what if 2 different sessions have loaded 2 different instances of the same object and both sessions try to update them. e.g:
Both sessions load object A with counter property=1
Session 1 increments it by 1 and then updates it in DB
Session 2 also increments it by 1 and then updates it in DB
So the final update will cause the counter property in DB to be set to 2 instead of 3.
Such problems will not arise when Caching of objects is done at the Process level but every object access will have to be synchonised since objects will be shared by all the threads. and this will slow the system down.
So which mechanism is more preferrable and should cause less problems as far as Synchronization and preservation of data Integrity are concerned?

Thanx in advance for suggestions and tips

Optimistic locking is used to control such situations. See version or timestamp tags.