This tale is by Spider Robinson. It appeared in Callahan’s Crosstime Salon (1976 Ace paperback, now in 2000 Tor paperback), and it is reprinted in the omnibus The Callahan Chronicals (1999 Tor trade paperback).

There were a few nods.

The Doc smiled and sipped scotch. “For those of you who missed it,” he went on, “it’s about a primitive empire that forms around an enormous, semi-mythical bear. Well, it, happens I know something about that empire that Adams forgot to mention, and now’s as good as time as any to pass it along.”

You see, the only way to become a knight in Shardik’s empire was to apply for a personal interview with the bear. This had its drawbacks. If he liked your audition, you were knighted on the spot. But if you failed, Lord Shardik was quite likely to club your head off your shoulders with one mighty paw.

Even so, there were many applicants, for the peasantry were poor farmers, and if a candidate failed for knighthood his family would receive, by way of a booby-prize, a valuable sheep dog from the Royal Kennels.

This consoled them greatly, for truly it is written, “For the mourning after a terrible knight, nothing beats the dog of the bear that hit you.”