Does not Look like Oracle report has this feature. .
I made following attempts:
at validation trigger of first parameter, inserted a value to the database field(say report_parameter table) to hold the value of my first parameter.
In my second parameter list I included the value from report_parameter table.
This appeared to be working fine for the default value(when parameter form was run for the first time) However, subsequent selection of parameter did not change the second list. It was still showing the old list.
My conclusion is that report parameter form does not dynamically update the list. Just does a one time retrieval of the list while parameter form is run for the first time.