A mix of all three, actually. Nobody overstepped their boundaries with the moves used by their Pokemon, largely understood the limitations their Pokemon faced, and respected type effectiveness. There wasn't any math involved, and things went more or less anime-style with people inventing new ways to use their moves. Again, it's expected that you don't go overboard with it. However, the collaboration usually came in where the players would discuss what's happening and what was to happen in the future; more often than not, the participants of the battle knew who would win in the end. It sounds complex, but it's actually pretty intrinsic and simple.