Are we living in a simulation? Nick Bostrom, founder of The Future of Humanity Institute at Oxford, seeks to argue that this scenario is not only possible, but in fact likely (given that we are able to develop the necessary technology before humanity’s extinction).
His line of reasoning is as follows: Because the number of simulations run by a civilization capable of running them would be very great, if simulations are done, then the number of people that are simulated would be much greater than the number of people that are not simulated, which would mean that the probability that we are living in a simulated universe is almost 1. So, it becomes clear that one of two things must be the case. Either the probability that simulations are run is very small (practically null), or it is almost certain that we ourselves are living in a simulation.
See his original paper, along with a filmed discussion!