Yes, you can do this. How I would do it would depend on my application and how many items I sell and how much variation in this formula I would need to support. For the most flexability, you would create two additional columns in your cart named "SecondDiscount" and "MultipleDiscount".
Then you can go to the calculations tab and update the totalprice calculation from:
[Price] * [Quantity]
([Price] * [Quantity]) - (([Quantity]>1)?(([Quantity]-1)*[SecondDiscount]):0) - (([Quantity>2])?(([Quantity]-2)*[MultipleDiscount]):0)
And then your values when you entered into the cart would be: