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I guess I do not disagree with your thought "In my travels, shopper negotiation anxiety is performance anxiety.  It's a lot like asking that pretty girl out for a date.  The anxiety is rooted in being wrong (i.e. paying more than they should have)." But if you know that to be true why not remove that possible anxious moment? Why not tell him that the pretty girl is available and interested?

As a dealer today I think you have a choice to remove the negotiation and position it as a customer benefit. In the end however I think it benefits the dealer just as much. You will see increases in both gross margins as well as customer experience. The thing you will have to be prepared to lose is the guy who threatens to walk over $100. I know every dealer wants to earn every customers business but lets be hones is that really the guy you want to fight to keep? Is there any chance that the guy that will walk out over $100 will actually come back to you for his next purchase out of dealer loyalty?

Not to discount your research(I happen to be good researching over a few beers as well so I expect an invite to the next brainstorming session) but we have conditioned shoppers over the last 100 years to think that negotiation is a necessary part of the dealership experience. If you do not negotiate you are a sucker. Your neighbor is just a byproduct of that history. If he walked into an environment that validated his discovery process as the correct one and reassured him that he isn't being taken advantage of he may actually buy for the advertised no haggle price and feel better about you for not putting him in that awkward position.