Definition of reputation commons problem

A situation in which the reputation of a group of firms, typically an industry, is tarnished as a whole due to the actions of a single firm within the group.  

Example

Observers are sometimes unable or unwilling to distinguish the characteristics of one firm from similar other firms.  For example, BP’s oil spill, in the Gulf of Mexico in 2010, led to a moratorium on deep water drilling that affected other oil companies.

In May 2010, US President Barack Obama ordered all 33 deepwater oil rigs in the Gulf of Mexico to stop drilling and extended the moratorium on new deepwater wells. [1]