I've been trying to remember that novel's title for years! But it seemed to my seive-like memory that I was still in junior-high when I read it...
ISFDb's entry on Galouye gives the title as Simulacron - 3, and the publication date as 1964 -- which clears up my perception of how old I was when reading it -- and emphasizes how much earlier the concept arose in SF than The Matrix.
Fantastic Fiction's entry shows the Bantam paperback cover I remember:
Now if I could just find a copy... it would be fun to read it again after ~40 years of real life computer evolution.
BTW, something else I found in ISFDb: Simulacron - 3 was reviewed by P. Schuyler Miller in the August 1965 Analog, as was another book which became a screenplay: Time Tunnel, by Murray Leinster.
Space/Science » in reply to The Matrix wasn't there first...
re: "Simulacron III"