The Simulation Argument is one of a number of ideas relating to the Simulation Hypothesis. The important distinction between this argument and earlier simulation models has been the addition of a proposed method of engineering Simulated Reality through the use of computers and the assumption that the conscious beings with the simulation are themselves simulated, rather than merely "brains in a vat"
Nick Bostrom's paper Are You Living in a Computer Simulation? argues that one of following propositions is true: (1) the human species is very likely to go extinct before reaching a “posthuman” stage; (2) any posthuman civilization is extremely unlikely to run a significant number of simulations of their evolutionary history (or variations thereof); (3) we are almost certainly living in a computer simulation. It follows that the belief that there is a significant chance that we will one day become posthumans who run ancestor simulations is false, unless we are currently living in a simulation.
Bostrom, Nick (2001,2003) *Are You Living in a Computer Simulation Philosophical Quarterly (2003) Vol. 53, No. 211, pp. 243‐255.
Bostrom, Nick (2011) *A Patch for the Simulation Argument Analysis, Vol. 71, No. 1 (2011): 54-61