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Co-channel full-reuse transmission is an important property in LTE downlink, which will generate strong inter-cell interference (ICI), especially in case of heterogeneous networks. The current LTE standardization supports the control of PDSCH transmission power to some extent via radio resource control signaling. In this paper, we propose a self- optimized downlink power allocation algorithm to efficiently use the transmission power while minimizing the interference to other users, which utilizes the concepts of game theory and fuzzy logic inference system. The proposed algorithm is suitable for the flat system architecture in 3GPP LTE-A system through a distributed operation manner, and minimizes the required information exchange among eNBs by the usage of fuzzy logic. And the simulation results illustrate the system performance benefits of the proposal compared to the conventional distributed waterfilling algorithm.