Where does the money gained after trainer battles come from?

Question

In the mainline Pokemon games, generally speaking, after a trainer battle, you get some money if you win.

Is there any in-universe explanation of:

1. Where this money is coming from (the other trainer? somewhere else?);
2. How the amount of money won is determined?

I wondered about this after defeating a preschooler in a trainer battle in Pokemon Moon, and winning some money. Did I just win his lunch money from him?

Answer 1

In the first 3 generations the amount of money lost is simply half of the money the player has. In Pokémon FRLG and all games from Generation IV onwards, the money lost is calculated depending on your team level and the badges earned, as you can see here.

For other trainers there's a similar behaviour which depends on the trainer's team level and a base payout depending on the trainer class. More info on Bulbapedia.

It's reasonable to think that you win a part of other trainers' money.