What to do

In Hanoi, or basically in any developing country, bargaining is a part of life. It is a social interaction that can be incomprehensible with first timer. For the Vietnamese local, it is expected to haggle, especially in small street vendors or even in shops that have no clear price tag. It is good practice to observe the local to see how it is done. When a price is given, the buyer does not show a hint of disagreement or anger. Instead, the person looks at the merchandise more carefully, checking for imperfection and faults. At the same time, the shop keeper will then reduce the price. The buyer will offer one more time; both of them will try to meet in the middle. At the end, both are happy with the sale. Through out the whole process, there is no frustration as both parties understand their role in the bargaining market like this. This point is essential for a foreigner to grasp. When a price is given, most foreigners will feel a sense of being ripped off and appalled at the price. However, this frustration will translate into bargaining in which the local seller will not understand. It is good to keep your cool as bargaining is just part of the process. 
There are some ethics when it comes to shopping and bargaining. Vietnamese believe in the luck of the first shopper. If you happen to be the first customer of the day, it is best to avoid extreme haggling because it may cause bad luck for the shops which will make the owner very uncomfortable. It is best to shop from noon onward. It is good to bargain for as much as possible for things like fresh fruits but without tension with shop keepers because you will need it on daily basis. With good relation with owners, you will benefit for both price and products quality in the long run. 
By default, a foreigner, despite his excellent skill of haggling, the lowest price is always higher than for local. It is deeply rooted in the mentality that foreigners are richer. Which is true considering the average income of the local people, especially for those selling fruits or motorbike taxi. Bargaining is good when you have to make the frequent purchase such as food daily so the total sum in long run will not add up. However, for big ticket items which you would not normally buy, bargaining for much lower does not worth the time and effort. At the end of the day, bargain only until the price is right for you personally, despite knowing the price for others. It will make your haggling experience more enjoyable.