Some ask this question. As so often, the answer for me is yes, no, and don’t know.
In a conventional sense, the answer is: I don’t know. And that’s fine, I don’t really need to know.
When I look more closely, I also find that I can know something about it, and the answer is yes and no.
The world as it appears to me, happens within and as what I am. I am capacity for it. It happens within and as what a thought may label consciousness. And I perceive it through an overlay of thoughts that labels, interprets, and creates stories and generally makes sense of it. In that sense, it’s a kind of simulation. It’s like a dream to me since it happens within and as consciousness, and it’s filtered and interpreted by my mental images and stories.
At the same time, there is consensus reality. It seems that I perceive the world more or less as others, at least in a basic and everyday sense. I see a blue sky, walk on the ground, open doors, eat, talk, and so on. In the consensus reality and pragmatic sense, I live and function as if it’s not a simulation. For all practical purposes, it’s not a simulation.
So I cannot know if we are in a simulation, in the way most people talk about it. It’s a kind of simulation since my world happens within and as what I am and is interpreted and made sense of by a mental field overlay. And for all practical purposes, in consensus reality, it’s not a simulation.