Shakespeare’s ‘Merchant of Venice’ brings the institutional change of the early modern era to the stage and raises the fundamental question of the collective effects of individual behaviour. The problems of interest, usury, and exchange have amply been discussed by generations of critics, not least from an economic point of view. And yet, the broader institutional contexts of the main elements of the plot, i. e. the pound of flesh, the three caskets, and the rings, have hitherto been remarkably neglected. Therefore, this essay puts the focus on such institutional matters by utilising concepts of modern institutional economics and tracing back their origins to the emerging triad of economics, ethics, and law in early modern Europe. In so doing, the question of self-interest and the common good – located at the very heart of Western thinking since its beginning – can be identified as the genuine economic core of Shakespeare’s play.