The presence of an overcompensatory response to damage in some plant species has recently created a debate concerning whether this trait is an adaptation to herbivory, or simply a physiological consequence of adaptations to competition for light. According to the latter hypothesis, competition for light favors fast vertical growth and strong apical dominance. The removal of apical dominance by damaging the primary shoot allows the growth of secondary shoots and hence increases productivity. We compare predictions of these two hypotheses in a model-system where plants are exposed to both a risk of damage and a risk of competition. Compensatory seed production is assumed to depend on the number of dormant buds that can be activated by damage, and on the seed production of surviving shoots. In accordance with earlier theoretical analyses, we expect that intensive herbivory can favor overcompensatory seed production. In contrast, competition for light should at best lead to exact compensation when the competitive environment remains unchanged. Competition acts against overcompensation for two reasons. First, competitive plants should have poor resource reserves to support compensatory growth. Second, competition for light is assumed to favor unbranched architecture and thus, activation of many secondary shoots should not increase the seed yield. However, we cannot exclude the possibility that plants adapted to competition may overcompensate when grown singly. In spite of this caveat, it is likely that overcompensation requires damage related adaptations that may evolve only under intensive and relatively predictable risk of damage.