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Fable: The Lost Chapters Hints
Beating the Bully
1 of 4: To find the small boy being menaced by the big bully, head down the path that goes NE from your home, cross the wooden bridge, and head right (or find the path between the tavern and the cheating husband's house that doesn't lead to the farm).
2 of 4: After talking to both the boy and the bully, decide how you want to handle the situation.
3 of 4: The good way is to use the Lock-On key to target the bully and then punch him until he gives up and runs off. Then you can see your father for a reward.
4 of 4: The bad way is to target and punch the defenseless little boy, then give the teddy bear the boy has to the bully for a reward. (Note that this makes it impossible to get a reward for the Rosie is Missing quest).