This book constitutes the refereed proceedings of the Second International Workshop on Internet and Network Economics, WINE 2006, held in Patras, Greece in December 2006. The 32 revised full papers presented together with 3 invited talks were carefully reviewed and selected from 79 submissions. The papers contain foundational and mathematical work from theories, methodologies, and applications in computer science, economics, mathematics, and management sciences for solving problems arisen in internet technologies, grid computing, network communication protocols, as well as social economic issues in virtual communities enabled through the World Wide Web. This book constitutes the refereed proceedings of the Second International Workshop on Internet and Network Economics, WINE 2006, held in Patras, Greece in December 2006. It contains 32 papers that contain foundational and mathematical work for solving problems in internet technologies, grid computing, network communication protocols, as well as social economic issues in virtual communities enabled through the World Wide Web. Recent Developments in Learning and Competition with Finite Automata 1 Abraham Neyman Dynamic Mechanism Design 3 Davide Bilb , Luciano Gual Guido Proietti Unconditional Competitive Auctions with Copy and Budget Constraints 16 Tian-Ming Bu, Qi Qi, Aries Wei Sun Truthful Auctions with Optimal Profit 27 Pinyon Lu, Shang-Hua Teng, Changyuan Yu Mechanisms with Verification for Any Finite Domain 37 Carmine Ventre Pure Nash Equilibria in Player-Specific and Weighted Congestion Games 50 Heiner Ackermann, Heiko R glin, Berthold V cking On the Complexity of Pure-Strategy Nash Equilibria in Congestion and Local-Effect Games 62 Juliane Dunkel, Andreas S. Schulz Strong and Correlated Strong Equilibria in Monotone Congestion Gaines 74 Ola Rozenfeld, Moshe Tennenholtz The Equilibrium Existence Problem in Finite Network Congestion Games 87 Igal Milchtaich First-Passage Percolation on a Width-2 Strip and the Path Cost in a VCG Auction 99 Abraham Flaxman, David Gamarnik, Gregory B. Sorkin Optimal Cost-Sharing Mechanisms for Steiner Forest Problems 112 Shuchi Chawla, Tim Roughgarden, Mukund Sundararajan Mechanisms to Induce Random Choice 124 Antoniy Ganchev, Late Narayanan, Sunil Shende Bayesian Optimal No-Deficit Mechanism Design 136 Shuchi Chawla, Jason D. Hartline, Uday Ruyan, R. Ravi Succinct Approximation of Trade-Off Curves 149 Mihalis Yannakakis Game-Theoretic Aspects of Designing Hyperlink Structures 150 Nicole Immorlica, Kamal Jain, Mohammad Mandian Competing for Customers in a Social Network: The Quasi-linear Case 162 Pradeep Dubey, Rahul Garg, Bernard De Meyer Selfish Service Installation in Networks 174 Jean Cardinal, Martin Hoefer Games of Connectivity 186 Pradeep Dubey, Rahul Gary Assignment Problems in Rental Markets 198 David Abraham, Ning Chen, Vijay Kumar, Vahab S. Mirrokni On Portfolio's Default-Risk-Adjusted Duration and Value: Model and Algorithm Based on Copulas 214 Ping Li, Hou-Sheng Chen, Guang-Dong Huang, Xiao-Jun Shi Price Roll-Backs and Path Auctions: An Approximation Scheme for Computing the Market Equilibrium 225 Rahul Garg, Sanjiv Kapoor New Results on Rationality and Strongly Polynomial Time Solvability in Eisenberg-Gale Markets 239 Deeparnab Chakrabarty, Nikhil Devanur, Vijay V. Vazirani Making Economic Theory Operational 251 Xiaotie Deng Sparse Games Are Hard 262 Xi Chen, Xiaotie Deng, Shang-Hua Teng Market Equilibria with Hybrid Linear-Leontief Utilities 274 Xi Chen, Li-Sha Huang, Shang-Hua Teng Polynomial Algorithms for Approximating Nash Equilibria of Bimatrix Games 286 Spyros C. Kontogiannis, Panagiota N. Panagopoulou, Paul G. Spirakis A Note on Approximate Nash Equilibria 297 Constantinos Daskalakis, Aranyak Mehta, Christos Papadimitriou Ranking Sports Teams and the Inverse Equal Paths Problem 307 Dorit S. Hochbaum Price of Anarchy for Polynomial Wardrop Games 319 Dominic Dumrauf, Martin Gairing Wardrop Equilibria and Price of Stability for Bottleneck Gaines with Splittable Traffic 331 Vladimir Mazalov, Burkhard Monien, Florian Schoppmann, Karsten Tiemann A Worm Propagation Model Based on People's Email Acquaintance Profiles 343 T. Komninos, Y. C. Stamatiou, G. Vavitsas Mixed Strategies in Combinatorial Agency 353 Moshe Babaioff, Michal Feldman, Noam Nisan The Sound of Silence: Mining Implicit Feedbacks to Compute Reputation 365 Mikolaj Morzy, Adam Wierzbicki Strongly Polynomial-Time Truthful Mechanisms in One Shot 377 Paolo Penna, Guido Proietti, Peter Widmayer Secretary Problems with Competing Employers 389 Nicole Immorlica, Robert Kleinberg, Mohammad Mandian Author Index 401